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Hops production on the rise
A new grower near Greenville has become a licensed food processor.
Pam Bouma Miller is very proud of the fact that her new business is a food processor, and she’s got the license to prove it.
First and foremost, she’s a farmer, but the license from the Food and Dairy Division of the Michigan Department of Agriculture and Rural Development means Hopyards of Kent is a licensed wholesale food processor. That means it can process hops raised by other growers.
Miller, her husband, John, and their son-in-law, Ian Mortensen, are partners in Hopyards of Kent, which is just a few miles west of Greenville and one of the largest family-owned hop farms in Michigan, with 13 acres under cultivation. Their first planting was in 2012, and the first crop was in 2013.
There is no mistaking a “hopyard” because nothing else looks quite like one. The height of the crop is the big thing: Hops are vines that climb to a height of 20 feet on strings made from coconut-shell fiber attached at the top to a steel cable suspended 20 feet above the ground on scores of what look like telephone poles. The roots are perennial and can live 20 years or more. The hopyard generally will need in-ground irrigation and also spraying to protect the plants from pests and diseases.
Installing a hopyard is costly, estimated at $12,000 to $15,000 per acre, not including the cost of the land. The plants are three to five years old before they start producing the maximum yield of cones, according to Miller.
It is a capital- and labor-intensive industry, according to producers and experts who spoke to the Business Journal. Miller said anyone who wants to become a commercial hop grower, as opposed to a hobbyist, “has to think of it as a very long-term investment.”
Until a few short years ago, banks reportedly weren’t keen on financing a new hopyard. The Millers are self-financed. Hop Head Farms in Hickory Corners, one of the biggest in Michigan, was financed by private investments, according to founder Jeff Steinman.
In September, the vine (actually called a “bine”) and the strings are cut at top and bottom and fed into a stationary “picker” made by the Wolf Company in Germany. It picks off the cones, which are actually a tightly furled flower, from the bine and then chops the bine, leaves and string into mulch.
Barry Johnson, the founder and former owner of Saugatuck Brewing Co. and a recognized expert on hop production in Michigan, said he once picked off all the cones by hand from a single bine and it took him one hour. The Wolf machine can remove the cones from up to 200 bines in an hour.
In addition to the Wolf picker, a processor also has to invest in a drying chamber, a pelletizer that makes pellets out of the cones and bags them, and a freezer for keeping pellets in storage at 26 degrees “for optimum freshness and stability,” said Miller.
According to Rob Sirrine of the MSU Extension Service in Leelenau County, investment in a small new hopyard, including infrastructure, equipment and facilities but not the land, can “add up to a couple hundred thousand dollars real quick.”
New York, Ohio, Indiana and Michigan were all hop producing states in the 19th century, but Miller said a blight destroyed the industry in the 1920s, and then there was Prohibition and then the Depression.
Sirrine said Michigan’s 1860 census indicates there were 400 acres of hops in the state. “We’re probably going to surpass that this year or next year,” he said.
It all started just a few years ago in concert with Michigan’s boom in microbreweries and brewpubs. The first hopyard was put in on Old Mission Peninsula around 2007 or 2008, according to Sirrine. The region is in the 45th parallel, recognized as having the ideal climate around the world for hops production, which is part of the reason Michigan’s largest concentration of hopyards is in Leelenau County.
The first big hopyard in Michigan was Empire Hops Farm near Empire, which Sirrine said has 116 acres of hops, some of which are grown under contract on other farms.
Hop Head Farms, which is in Barry County in southern Michigan, is thought to be the second largest, with 30 acres of its own hops and contracts from another 35 acres. Jeff and Bonnie Steinman started growing hops there in 2007. Their facility was set up to process 80 to 100 acres of hops.
“Many other processors are playing catch-up,” said Steinman.
Johnson said there may be as many as 100 growers now, but there are only six processors in the state, including Hop Head Farms and Hopyards of Kent.
Johnson said when he started Saugatuck Brewing Co., local farmers began asking him if he would buy their hops if they grew them. “They just didn’t have a clue” what that entailed, he said, “but that’s all changed in the last three, four years.”
Most hops in the U.S. are grown in Washington, Oregon and Idaho. Ian Mortensen of Hopyards of Kent is a native of Yakima, Wash. Hopyards got a lot of advice from growers in the Northwest because of Mortensen’s connections.
The big U.S. breweries buy their hops from the Northwest, probably at about $8 per pound, Johnson guesses. “Michigan producers don’t have the economy of scale that they have in Washington, Oregon and Idaho, so the price, of course, is higher,” he said.
Breweries in Michigan are paying $12 to $14 a pound for Michigan-grown hops. The growers get about half of that when they send their raw product to a processor.
Johnson said there are about 150 brewers in Michigan now, “and about 120 of them have taprooms” where they sell their beers. Big national breweries have slim profit margins on their wholesale beer, but a microbrewery selling its production on-site doesn’t have all the storage and transportation and other costs the big brand names do.
“It’s a very profitable glass of beer,” he said, which enables craft breweries to buy Michigan-grown hops — key for the survival of the hop growers.
The Pure Michigan emphasis on buying Michigan products is a key element in the burgeoning brewing business in Michigan. The abundance of craft breweries and local hops production “makes Michigan almost like a cult,” said Johnson.