Growers are making a big investment in new plantings and facilities, the processing and marketing co-op NZ Hops says.
The 23 member producer co-op in Tasman handled just over 720,000kg last season from a mix of cultivars including 17 unique NZ varieties, six northern hemisphere types and four trial hops.
NZ Hops chief executive Doug Donelan said extreme wind and heat dominated the growing season before harvesting started in mid February. A wet winter and spring were followed by a heat wave then ex-tropical Cyclones Fehi and Gita.
It meant growers produced a much lighter crop than expected – disappointing given five new growers had joined the co-op and the total area under production was up 90ha this season.
Total volume harvested was 721, 959 kilograms, a decrease of just over 38,000kg on the year before.
The co-op procures contracts for its Tasman growers. Donelan said growers had invested tens of millions in onfarm facilities and land to expand the industry recently.
It had 18 growers two years ago and now it was 23, with two more set to join the industry next year. The co-op has 531ha of crops.
There is also another grower outside the co-op, Freestyle Farms.
Hops grow only in a narrow latitude and climate. In NZ that’s around Motueka.
Land and hop-growing is expensive, Donelan said.
“For a 40ha hop farm you’re looking at $10m investment in the co-op.”
On the flip side, it is more profitable than it used to be.
For decades hop-growing was a bulk commodity trade based on volumes and spot-price payments.
The cost of shares in the co-op is based on production and everyone gets a share of returns from a contract.
The rise of craft beer has brought more contracts into the market and big breweries like Lion and DB paid for a wide range of hops too, Donelan said.
Plantings are dominated by specialty aroma hops.
“We’re now growing specialty varieties which aren’t as high yielding but are higher value.”
In response to better contract payments the co-op is about to spend $3.5m on shared cool storage and logistics.
Donelan said demand for NZ and specialty hops continues, however, market signals are slowing down in mature, craft beer markets.
That market is still quite buoyant domestically and overseas with significant growth in developing markets, he said.
