Hallertau Growing Region & Drinktec September Report #05-04

Transcription

1 Hallertau Growing Region & Drinktec September Report #05-04 HALLERTAU The metamorphosis every hop-growing region undergoes during harvest is nearly complete in the Hallertau. Results are beginning to come in about yields, both alpha and tonnage per hectare and the results, thus far, are good. No longer are there enough hops remaining in the field to get an overall impression of the quality of the crop when one drives through the Hallertau. Now, it is only possible to tell that harvest is nearly over. Hop harvest in the Hallertau is nearing an end. Enough of the crop has been picked that it is now obvious to most growers in Germany that 2005 was a better year for hop production than 2004 in both hop and alpha yield. Only five or six days remain of harvest, with most growers either already finished or finishing by Monday. There were some changes in the harvest lineup since the last report. Taurus, normally harvested later than Magnum, matured early. The bulk of the Taurus acreage was harvested just prior to my arrival in the Hallertau. Yields for the Taurus variety are reportedly average with some fields yielding slightly better than average. Alpha acid yields for the Taurus variety were excellent, with some fields delivering percent alpha. A safe average for the Taurus variety for this year appears to be approximately 16 percent alpha. The Magnum variety reportedly yielded an average crop this year with average alpha acid values. For the Magnum variety, this means approximately 14.5 percent alpha, a number that can also be considered the average yield for the variety for These figures are all HPLC. Columbus and Nugget yards have yet to be picked. In the Magnum, Taurus, Columbus and Nugget yards, Botritus was a significant problem this year. Given the excessive rainfall during the season, that came as no surprise to many growers. HERCULES The jury is still out on the Hercules hop. It appears that it will be several years before any valuable information comes to us from the Hercules hop. In 2006, many growers are planning on planting some Hercules acreage. That acreage will only produce a full crop in By 2007 or 2008, we should better understand the full potential of this new German super alpha variety as existing yards will be farther along their life cycle by then. Until a significant number of growers are producing a significant acreage of Hercules, it will be unable to tell whether this is the German hop of the future. At this stage, everybody is getting acquainted with the new variety. The Hercules variety has a different oil profile than the traditional varieties. No more details available just yet on exactly how it differs or what problems these differences are causing. It must at this time suffice to say that it is taking some time for workers at the St. Johann plant in Germany to get accustomed to the new variety. DRINKTEC There was a lot of interest in how the American crop is doing this year. The fact that there is no American presence at the Drinktec other than Yakima Chief caused quite a stir among the international hop community. It was the topic of conversation in nearly every conversation I had. Many representatives from other hop producing countries said that they too had received questions about the status of the American industry. Regarding the American crop, several sources say that they have 1

2 heard that the American crop will be down between 10 to 25 percent this year. There are also figures floating around out there that alpha acid production may be down by a similar amount. This brings up an interesting topic, how the merchants are presenting the crop to the brewer. Each merchant with an American presence presented a somewhat different view of the situation to brewers leaving them very confused. I heard from several brewers their concerns over the inconsistency in the information. They simply did not know what to believe. The Steiner organization reportedly has told brewers that there will be enough hops this year and that everything seems to be fine. The Barth-Haas organization is reportedly telling brewers that there will be a deficit of hops this year. The Yakima Chief organization seems to be falling somewhere in between these two answers and is reportedly telling brewers that the crop will be down somewhat but at this time it is too early to know exactly by how much and whether the reduced production will have any effect on price. At first glance, it would appear that somebody is lying or trying to manipulate the market. I must admit that this was my impression as it was the general impression of some of the brewers with whom I spoke. After some thought however I don t think that to be the case. Given the specific meaning of some carefully chosen words, I don t think that any of the merchants are lying or guilty of misinformation. This is of course only my opinion. I may be wrong, but I will briefly explain why I believe this to be the case. The Steiner organization s statement, which on the surface appears to be the farthest from the truth, is actually true at some level. Despite the current deficit production, there will likely be enough hops for beer production in the year. This is true, of course, because of the excess inventories held by some brewers and some growers that will most certainly find their way into the market this year. The Barth-Haas statement that there is a deficit and possibly a shortage this year is true if we look at this year s production compared with the anticipated demand for hops this year. Yakima Chief s statement is relatively non-controversial and, in my opinion, the most accurate of the three statements presented to the brewer simply because it is purposely vague and leaves so many questions unanswered. On September 13, Stephan Barth, during a press conference, stated that the American crop is worsening every day. The following day, the headline in the newspaper, the Wolnzacher Anzeiger, reported the news as a headliner story. Since then, the Hop Growers of Germany office has been receiving non-stop calls from growers wondering what is happening. They wonder and ask whether they should sell or whether they should wait to sell. Growers have been told it is too soon to know how the overall crop will turn out this year and that they should wait a couple weeks to know for sure. This answer has not calmed growers nerves. Growers are nervous and concerned over the news because they want to take advantage of the opportunity for higher prices if it presents itself. The HVG pool a week ago last Friday with a prepayment of 2 /Kg. for the Magnum variety. Reportedly the reaction from both Steiner and Barth companies was that the prepayment price was too high. This despite the fact that the Barth company had recently purchased some Magnum variety hops for 2.5 /Kg. the week prior to the opening of the pool. Steiner is reportedly not in the market at this time in Germany but was of the same opinion regarding the HVG pool prepayment price. Of course, the result of the HVG opening their pool with a prepayment price of 2 /Kg. is that both Barth and Steiner must do the same in order to secure a hop supply for the coming year. If they open their pools with lower prices, growers will commit all the available hops to the HVG pool. On the spot market, Taurus hops are reportedly selling at this time for 2.9 /Kg. There is no market at the moment for Magnum this week. The likely reason for that is the uncertainty with the news from America and what affect it will have upon the price. 2

3 Prices for alpha in Europe are reportedly between /KgA. This seems to be a world market price as one Asian brewer confirmed to me that he was recently quoted prices of approximately $40/KgA. INTERVIEW WITH JOZE CHAS FROM SLOVENIA There are two sides to every story. When I told Joze that I believed that and that I wanted to report his side of the story following the previous MacKinnon Report, he understood that I was not trying to paint a bad picture of him. We met to discuss the details of the merger between his company, Unihop, and Hmezad Export Import. To begin with, I must say that Joze was open with me regarding the details of the Slovenian industry, some details of his business and his concerns for the future. Furthermore, he extended an open invitation to me to visit him in Slovenia for more information and that some of his employees would also be available to provide me with information in the future. Talking with Joze, it is clear that he realizes the monumental undertaking he is trying to achieve. With the merger of Unihop and Hmezad Export Import, he will control between percent of sales of Slovenian hops. As such, he realizes that he is the biggest, and in many cases the only target for many growers criticism. In the past both companies have sold hops to the Barth and Steiner companies, competing with one another by lowering prices. Joze mentioned several times that he has no interest in playing those sorts of price games but also plans to maintain these valuable relationships. In fact, he sees that maintaining these relationships as well as the relationships with growers is going to take a concerted effort on his behalf. That said, after the take over, Joze learned that the Hmezad organization has some future contracts signed with breweries for very low prices, yet another obstacle he must overcome in the near future. Joze commented that prices to growers for Styrian Goldings for the 2005 and 06 crop are approximately 4 Euros per kilogram. He maintains that he has signed some three-year contracts and would like to sign more in the near future, now that the market is becoming clearer. He says the minimum price for 2005 Aurora is 3 /Kg. Aurora is the Super Styrian variety, often used as a Perle substitute. Joze acknowledged that he does plan to sell Slovenian hops directly to breweries around the world in the future. The merger of the two companies is still in an embryonic phase however and there is much work to do in the weeks and months to come before a dream like this can be realized. Joze acknowledged that and is looking forward to the changes ahead. He believes changes like streamlining the Hmezad organization, which he believes is heavily overstaffed, will improve operations greatly. Joze was somewhat critical of the research institute and the funds that are spent each year. It is clear that politics and rivalries within the hop industry are not American phenomena alone. Joze says the institute, which employs 52 people has not produced a viable new variety in nearly 25 years. He continued that he would like to see some changes so that variety development, disease and pest management are given higher priorities. He may be able to affect that change as he now sits as one of 3 growers representatives on the seven-man board that governs the research institute. The other 4 members are Ministry officials. 3

4 GERMAN AUTOMATIC STRINGING MACHINE In response to a special request I managed to get a lead on the German automatic twining machine... which does exist! I learned from a few people that they believe it doesn't work very well. I think they are more skeptical than anything. I talked with one grower who seemed to know a bit more about the machine. It seems that most people know of the machine s existence but are not certain who has built it or in what condition it is currently. The grower with whom I spoke knows the owner, who has spent his own money to develop the equipment. Reportedly, the owner has plans to begin building them to order in The thing that makes it a bit different is that in Germany they use wire instead of coir. This machine is intended to attach the wire, but only to the top of the trellis. Fields are muddy in the Hallertau in the spring so growers usually put their wire (which doesn't rot during the winter) up in the fall or winter when they can get in the fields easier. So, there is no system for tying the wire to the bottom yet, which is (possibly) why a lot of growers a skeptical. Even with the machine, they still need to send a crew in to string. Before the final report of this year, I will work on getting some pictures and more information about the machine. ELECTION Today, September 18 th is the election for the new Chancellor of Germany. While you have probably heard everything the media has reported on the election, hop growers opinions are interesting. They almost unanimously believe that a continued Schroeder Chancellorship will be bad for agriculture in general. Schroeder is the equivalent to a social democrat by American terms. His coalition is composed of the Green party, which, in U.S. terminology would be the equivalent of the environmentalists. Only time will tell, but many hop growers are hoping for a Merkel victory despite the fact that she is from the former East Germany, a region that in the opinion of many Bavarian Germans, has sucked the life out of the German economy with little or no results for over a decade. FUTURE OF THE MACKINNON REPORT This year, as the first year of The MacKinnon Report, has been somewhat of a trial basis for all of us. I appreciate your patience and your trust in me to provide you with accurate and up-to-date information regarding the status of the German crop. It has been an interesting and truly enjoyable experience for me. The compliments I have received from some of you make me believe that you too are satisfied with the result. Although not originally part of the package, I will offer a bonus report to all first year subscribers for free. This report will come out in mid November and will recap the 2005 growing season. I chose this time because toward the end of October, actual data becomes available from all the hop-growing areas within Germany. I believe that information along with the growers impressions of the year at that time will be of some value to you and it seems a good way to close out the reporting year. Somebody at the Steiner organization leaked the contents of the previous newsletter to Joze Chas, subject of part of the previous report regarding Slovenian hop production. While this is of some concern to me, I think it has all worked out for the best in this instance and I could not have asked for better publicity. This is a tailor made opportunity for me to mention one new feature for The 2006 MacKinnon Report. To eliminate the possibility of information that you have paid for falling into the hands of non-subscribers, in 2006, I will encrypt The MacKinnon Report using 128 bit encryption software I have recently purchased. The reports will still come in a.pdf format as they have this year. The difference will be that you will need special reader software to be able to view the file on your computer. This reader software is free and can be downloaded online. The program allows me to list who can view the file and gives me control of many other functions as well. 4

5 Above: The landscape of the Hallertau is changing as much of the Hallertau now has only empty hop fields. Left: Botritus in Columbus hop cones Below: The wilt yard this report has followed through the season. As you can see, wilt took over the field. What remains in the picture are the vines that were not harvested. The grower estimated that he only managed to salvage 20 percent of the crop in this field. 5

6 Above: Columbus Cones Left: A Columbus Yard. At least two Columbus yards will come down in They are contracted until 2005 and without future contracts, the grower will not continue to produce them. There still will be Columbus variety hops in the Hallertau after these yards are removed. It is likely at this time that Perle and Herkules varieties will replace the existing Columbus yards. 6

7 Above: Herkules Cones. Right: What the Herkules cone seems to lack in size, it makes up for in number. Each Herkules vine is filled with cones from top to bottom. 7

8 Above & Below: Magnum yard being harvested. Right: Magnum Cones 8

9 Above: Cones. Taurus Right: Taurus hops being fed into the Wolf picker. 9

10 Left: A Nugget yard Below: Another day, another fest. The Geisenfeld is this weekend to celebrate the end of hop harvest. I was invited to attend opening night. 10