Hop market report 2012

In 2011 the world hop crop amounted to approx. 98,000 mt to 100,000 mt. 38 percent of this quantity was harvested in Germany and 29 percent in the US. An alpha quantity of approx. 10,000 mt was produced. Alpha losses from harvest to processing have been taken into account, however, processing losses and further storage losses until use of the hop products were not considered. This gives a world average alpha content of 10.3 percent. Germany produced 41 percent of the world alpha and the US 36 percent. Germany and the US are further strengthening their leading role in the world hop market.

• Nearly two thirds of the world acreage are situated in these two countries;

• more than two thirds of the world hop crop are harvested in these two countries;

• more than three fourths of the world alpha quantity are produced in Germany and in the US. The remaining market shares are split up between the other 28 hop growing countries.

In 2011 world beer production rose by more than 60 million hectolitres to a total of 1.9 billion hectolitres. Not all countries could participate in this increase. This is clearly visible by the fact that about 42 million of the total increase of 60 million hectolitres were produced in China. With growth rates of more than 7 percent Asia and Africa are the „winners“ in world beer production.

For the brewing year 2012, a further increase in beer production of 2 percent can be assumed. Nevertheless the alpha dosage per hectolitre of beer may only amount to 4.0 grams. Any late hop dosages (as usual in craft brewing) scarcely resulting in an isomerization of alpha acids are not considered in this calculation. Based on these estimated figures, an alpha demand of approx. 7,850 mt can be assumed for the brewing year 2012. Approx. 200 mt of alpha will be required for use beyond brewing purposes. Therefore the total demand of alpha will be about 8,050 mt. Processing losses and further storage losses until use of the hop products have not been considered.

Based on these figures the crop 2011 alpha quantity will exceed the calculated alpha demand for the brewing year 2012 by 2,000 mt.

In 2011 the hop market oscillated between extreme values:

• The world beer production has never before been as high as in the brewing year 2011, but the alpha dosage per hectolitre beer has never been so small;

• Since 1955, the world acreage has never been as small as in 2011 with 48,500 ha, but the yield per ha has never been as high, amounting to more than 2 mt in 2011.

• The average world alpha content over all varieties reached the highest level ever with more than 10 percent in 2011, and the total alpha overproduction has for the first time ever amounted to nearly 10,000 mt.

Although acreage is constantly decreasing, the oversupply of the market has continued since 2008.

According to the available or estimated figures for 2012, the decrease in acreage will continue. The most important hop growing countries show the following development:

− Germany: 1.100 ha

− Poland: 200 to 300 ha

− Slovenia: 200 to 300 ha

− Czech Republic: 200 ha

− China: 100 ha

− US: + 400 ha

Regarding the US figures, it has to be considered that about 700 ha of acreage of high alpha varieties were taken out of production, whereas 1,100 ha were newly planted with aroma varieties for craft brewing.

The reduction of acreage worldwide amounts to approx. 1,500 – 1,600 ha in total and the acreage itself is round about 46,000 to 47,000 ha. Assuming a normal crop 2012 the world average yield of all varieties would amount to 1.95 mt per ha resulting in a world average alpha content of about 9.4 percent.

Calculating with these average figures for a normal crop and the acreage mentioned above a world crop result of 90,000 to 92,000 mt or approx. 8,600 mt alpha are probably. This quantity would again exceed the prognosticated alpha demand for the present crop year.

Even considering the growth of the US craft brewing industry with its high hop dosages this won’t lead to a visible relaxation of the world hop market. Moreover there are no reliable studies or forecasts of the further development of this market.

In view of the Hop Association, the acreage clearings effected are still not sufficient to stop the overproduction – especially in the high alpha sector. Considering the high inventories due to overproduction in previous crops, there is nearly no hope for a market recovery soon.