USA, ID: Less demand for hops reduces crops in Idaho

A well-kept agricultural secret is that Idaho has long been considered one of the nation’s top producers of hops, a key ingredient in beer, Idaho Business Review reported on November 10.

And while the Gem State still ranks as one of the top three states for producing hops, both production and acreage devoted statewide to the crop are slowly on the decline.

“You’re seeing shrinkage throughout the whole supply chain within the entire hop industry, said Dianne Gooding, a sixth-generation hops farmer who, along with her sisters, Michelle and Andrea, helps oversee Gooding Farms in Parma, while also serving as the vice chair of the Idaho Hops Growers Commission (IHGC).

Established in 1955, The IHGC works to protect Idaho hops, and helps conduct relevant research for their continued growth and health. Harvesting for hops typically begins in August and continues into October.

According to Gooding, Idaho’s roughly 5,100 acres of hops slightly trails Oregon’s 5,400 acres of hops farms. But Idaho hops growers, she said, will still slightly outpace its neighbors to the west in volume, though remaining far behind the nation’s leading hops producer, Yakima Valley in Washington state.

“In total estimated pounds of production by volume, Idaho will exceed Oregon because our yields are tremendously better. But the heart of our industry is still in Yakima Valley in Washington.

No matter which state is at the top, when it comes to hops, quality is king. Gooding emphasized a strong focus on soil fertility and plant health by those who produce Idaho hops.

“What we do as well as other growers, we feel as an area our quality is quite consistent and is at or better of what people can get out of Washington,” she said. “We have nice aromatic and oil qualities, so we look at factors like summer versus summer, or area by area and what those differences equate to in the end product.”

Though Yakima is still ranked No. 1 for production, acreage in that area devoted to hops is declining as well.

“At one time, Yakima was over 40,000 acres and now they’re just under 32,000,” she said. “You’re seeing shrinkage throughout the whole supply chain within the entire hop industry.”

Comparatively, Gooding succinctly referenced how Idaho’s 8,700 acres of hops statewide has dwindled to just over 5,000 acres today. “Oh, it’s way down,” she said.

Statewide, only about a dozen farms grow hops in Idaho, producing about 20 or so varieties in total. Of Gooding’s 1,100-acre farm, roughly 620 acres are devoted to producing about 14 different types of hops.

“Northern Idaho has some different varieties they can grow due to the cooler temperatures that we can’t,” she said.

One key factor Gooding attributes to the decline in overall hops production is drastic changes in drinking preferences and demographics when it comes to beer and other alcohol consumption.

“Globally it’s about a 1 to 2% decline for all alcohol,” she said. “There is a whole general decline in alcohol consumption, and we know that is particularly true for beer consumption.”

Younger folks, Generation Z in particular she noted, are drinking less or simply seeking other adult beverage options such as canned cocktails, seltzers, ciders and other beer alternatives.

“Generation Z is the soberest generation in the history of data,” Gooding said. “More so than the Prohibition generation. It’s kind of a rough world we live in out there when it comes to beer production and alcoholic beverages in general.”

For Mike Garcia, who owns and operates two Loose Screw Beer Co. locations in Meridian, he knows well how tough the craft beer industry can be. Prior to owning his own brewery, Garcia spent about 12 years gaining valuable experience helping to finance brewery businesses.

“It’s no surprise that craft beer has seen a significant decline as far as the overall industry,” Garcia said. “But we’ve positioned our company well to not feel those effects.”

His newest location in downtown Meridian, opened for about a year now, was recently named the People’s Choice Award winner at the recent Idaho Business Review Top Projects awards celebration.

Though he mentioned possibly considering a future third Loose Screw location, his vast industry experience also tells him that brewing beer these days is not a business for everyone.

“There have been so many casualties in the local beer industry,” he said. “It’s really a tough environment in which to compete. Ultimately it comes back to that beer pricing. We’re looking at razor-thin margins.”

Keeping true to what he does best, producing quality beer, Garcia is adamant about his decision to keep his successful outfit from venturing into the beer distribution aisle.

“To distribute a barrel of beer, a brewery is lucky to make $300 per barrel,” he said. “We’ve had requests to get into distribution, but it’s not what we want to do. We’re focused on a taproom model, meaning quality beer first, and that is where I think a lot of breweries get sidetracked going the distribution route and staying focused on volume.”

Plus, with so much local hops production in proximity to his brewery allows Garica to streamline his brewing process and to produce a top-quality product.

“We have a unique opportunity in the Treasure Valley where we can brew with hops within just a couple of hours of them being picked off the vine,” he said. “Unless you live here or out in the valley near Yakima, there is not a lot of opportunity to do that across the nation. It definitely changes the beer being able to do this with fresh hops.”

And hops farmers, like successful local breweries, must also adjust these days in their business practices. In Gooding’s case, a big change came just three or so years ago, a process she refers to as “diversification” on the family farm.

This involved planting smaller plots of bell peppers, onions or sweet corn, as well as devoting some acreage to grazing for sheep and cattle.

“Back then we could see the writing on the wall, and we were likely heading for a slowdown,” she said. “In one day last year, we were harvesting six different crops on our acreage. We went from pretty specialized to pretty diversified.”

The ebb and flow of the agricultural business make such changes necessary for longtime, multi-generational hops farmers.

“The nice thing about the diversification is it provides great cash flow for different parts of the year when the hops are not as lucrative,” she said. “In the summertime, having this diversification is what creates this additional or new opportunities for cash flow.”

Having so few hops farms statewide, one might think the business to be overly competitive. But Gooding says those producing hops on Idaho’s dozen-or-so farms do get along well. There is, she said, a willingness to help each other and “exchange notes and ideas” for production.

Similarly, she noted that such camaraderie can ebb and flow too, often determined by hops production during a given year.

“When times are good, there is a way less competitive nature, and when times are bad it definitely gets a little tighter,” she said with a laugh. “But overall, it is a pretty tightknit community. And at the end of the day, we’re all fighting to keep our market share.”

One way to help keep that share is through trade missions. Citing statistics that indicate 45% of U.S. hops, and up to 50% of Idaho hops are marketed internationally, Gooding detailed an upcoming trip, along with those from the Department of Agriculture, to Vietnam to help expand Idaho’s reach in hops production.

“I like to say, ‘we’ll sell you hops as long as your check is good,’” she said. “Overall, the Idaho brewing scene is not huge. What a brewery like Loose Screw uses in a year, I probably bail in one hour or maybe two. I don’t know how much, in terms of hops they purchase annually, but I think it is a good guess.”

And for Garcia, who serves on the guild of Idaho Brewers United (IBU), a group which works to help support and protect the rights of craft brewers statewide, keeping the process simple and local, despite a decline in hops production, is what helps make his brewery successful.

“We’re going to stick to what we know, and that is to provide a quality beer product for Meridian,” he said. “We’re going to focus on education for those ordering beer, asking what they like or don’t like, provide samples. Those types of components help us to stand out while at the same time you’re seeing a decline in the overall industry.”