Food Service & Agriculture, Higher Education, and Manufacturing

Are brewers ready for the next step?

Conference examines need for more hop and barley growers, processors.

April 3, 2015
| By Pat Evans |
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Pilot Malt House Ryan and Erik
Ryan Hamilton, left, and Erik May of Pilot Malt House believe following ingredients farm-to-glass is the next logical step in the local movement. Photo by Michael Buck

As more drinkers put down their Bud Lights and pick up craft beer made in Michigan, the next step is to see those Michigan beers made with Michigan ingredients.

In the future, the state’s 150-plus microbreweries could be fueled by a network of hop and barley farmers, said Ashley McFarland, director at Michigan State University AgBioResearch’s Upper Peninsula Research and Extension Center.

The desire to see more hop and malting barley farmers and processors in Michigan led MSU Extension to form the Great Lakes Hop and Barley Conference, which will take place Friday and Saturday in Grand Rapids. The conference partners also include MSU AgBioResearch, ISLAND (Institute for Sustainable Living, Art and Natural Design) and Michigan Brewers Guild.

Attendees will find various seminars with speakers ranging from chief economists from the Brewers Association and the National Beer Wholesalers Association to brewers and agricultural educators from MSU.

Seminars will take place both days, and Saturday will be capped off with tours and lunch at Hopyards of Kent and Pilot Malt House, for the respective tracks of interest.

Pilot Malt House founder Erik May said the conference is shaping up to be a lot larger than he originally thought, with more than 200 people attending.

“I really thought it’d be a few dozen people,” May said. “Michigan State has really turned this into something great.”

May said following ingredients farm-to-glass is the next logical step in the local movement. The Brewers Association recently released data showing craft beer now makes up more than 10 percent of the beer market, with a goal of 20 percent by 2020. Michigan’s brewing industry has a total economic impact of more than $133 million, according to the Brewers Association.

Craft beer generally uses more of both hops and barley crops than light lager competitors, necessitating an increase as the market continues to shift.

The conference will help prospective growers and processers understand what it takes to start growing hops or barley, but it also will help existing growers understand the need for quality.

Both crops are in their infancy in Michigan, with approximately 300 acres of hops and 200 acres of usable malting barley. Michigan Brewers Guild Executive Director Scott Graham said he thinks fewer than 100 of the state’s breweries currently are pursuing the idea of using Michigan ingredients.

“Michigan could get by if these don’t develop,” he said. “But there is a lot of potential if they get up to speed.”

Hops were grown in the 1800s in Michigan, but by Prohibition, the entire industry was wiped out for a variety of reasons. The industry eventually relocated entirely in the Pacific Northwest and, for more than 100 years, the nation’s crop was grown in Washington, Oregon and Idaho.

Those three states grew 97.8 percent of the hops in the United States in 2014, according to the Hop Growers of America Annual Report. Washington alone grew more than 22,000 acres. The report also included 14 first-time states, including Michigan, which made up just 2.2 percent of the 38,011 acres of hop growth.

The United States is catching up to Germany, the world’s top hop producer. In 2012, the U.S. grew just 29,683 acres. This year, it was just short of Germany’s 42,770, which put out nearly 14 million more pounds of hops than the United States.

Michigan grew just 300 acres of hops, according to the report. That number is set to jump significantly and could continue to rise well into the future, said Brian Tennis, who owns New Mission Organics hop farm in Omena and is the owner of the Michigan Hop Alliance.

New Mission Organics grew 30 acres of certified organic hops last year and supplied mostly all-organic breweries such as Grand Rapids Brewing Co.

Tennis said Michigan’s location puts it in the sweet spot for hops growing. Hops grow best between the 30th and 50th parallels in both the upper and lower hemispheres, with the 45th parallel being the sweet spot, he said. Hops have been valuable crops in the Pacific Northwest and Europe and are now turning up in Australia, New Zealand, Japan and much of the United States that lie in that zone.

There are hundreds of varieties of hops, chosen for reasons from aroma and flavor to bittering. Hop flavors vary greatly, even within the same variety, based on a region’s terroir — much like wine grapes.

When Tennis planted his first acres of hops eight years ago, he said there were just a few acres of hops in the state. There are wild hop plants across the state, as well, which could develop into unique products for Michigan farmers.

“We really are in the perfect climate,” Tennis said. “We have some mildew pressures, but we can overcome those. It’s mind blowing to see where we’ve come.”

Established breweries contract for more than 80 percent of the annual hops harvest in the state, which leads fledgling and small breweries to pick over what’s left. There is an opportunity to grow, Tennis said, but brewers need the cost of using Michigan-grown hops to make sense and also require an even quality in the hops.

This brings the industry to a chicken-or-egg scenario, Tennis said. Some breweries aren’t on board to pay the prices for a product that is still somewhat unproven.

“We have to invest in the infrastructure, but we need to have a reliable market,” Tennis said, whose organic niche allows him to compete with the same product out west. “It’s economies of scale. In the past our pricing was really expensive with the amount of acreage we grow. But we’re catching up.”

Founders’ 2014 Harvest Ale used 80 percent Michigan hops, Founders’ director of brewing operations Alec Mull said. He said Michigan’s processing isn’t quite where it needs to be quality-wise to match the generations of experience and well-developed infrastructure of the Pacific Northwest.

Still, Mull said with the help of MSU, the Michigan hop industry is seeing a positive trend and is likely the strongest non-traditional hop-growing region in the country. He will speak on a panel at the conference about what breweries are looking for in terms of hops.

Tennis said some of the state’s best clients have been small breweries looking for between 10 to 100 pounds of pelletized hops, as the price can compete with those out west at between $10 and $14 a pound.

This year, Michigan is set for a steady boost in hops acreage. A private equity-backed farm, MI Local Hops in Williamsburg, will plant 200 acres each year for the next five years — although hop plants don’t yield 100 percent for the first three years.

That rapid increase could leave some of the smaller farms at a disadvantage unless they adjust to specialize in certain hops, Tennis said. It costs nearly $13,000 to start a new acre. Processing equipment also is extremely expensive, leading farms to form co-ops and share the equipment.

“It’s a cost-prohibitive industry; it’s not a hobby,” Tennis said. “Once you see one private equity farm, there will be more.”

Cost is one factor May is using to convince farmers to switch to malting barley. The barley, and other small grains, are cheaper to grow than soybeans and corn and ultimately could make the farm more money when sold for malting. Last year, Pilot Malt House had 85 acres grown for malting; this year May said it will be up to 300 acres.

The quality of that barley, however, is in question, and May turned away half of last year’s crop grown for his company. How to improve quality is one of the main subjects of this weekend’s conference.

“We have a responsibility to provide brewers with the best product possible,” May said. “We have to give them a product that they’re used to, and it’s not easy to do.”

May isn’t optimistic Michigan will ever be able to provide the state’s breweries with all the malt they need: Bell’s alone uses approximately 50 tons a day.

Much of the malt that breweries use comes from the Great Plains states where there are millions of acres of malting barley grown, as well as from Canada and Europe.

May said he hopes Pilot and other similar-sized malting operations can scale up with recent startup breweries and eventually source 100 percent of their grain from Michigan.

In the early 1900s, there were approximately 300,000 acres of barley in Michigan, more than half of which was malting barley for the state’s breweries, according to McFarland. Even in the 1980s, when Stroh’s Brewing Co. was at its peak, Michigan had more than 100,000 acres. Once Stroh’s left the state and corn and soybean prices soared, farmers deserted barley.

“There’s no reason we can’t and don’t grow barley in this state,” May said. “We have the right climate and soil to grow it. We have a long history, and we just need people to commit to the high quality.”

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