Hop Market Report 14th June 2017 Hop acreage grows by approx. 3.060 ha (+5,4%) to 59.200 ha worldwide ******** Normal growing conditions so far; balanced alpha supply and demand expected for brewing year 2018 I. Changes of acreage by country: 2016 2017* change ha ha ha % Germany 18.598 19.543 945 5,1% Czech Rep. 4.775 4.945 170 3,6% Slovenia 1.484 1.560 76 5,1% Poland 1.475 1.615 140 9,5% England 920 942 22 2,4% Spain 540 540 0 0,0% France 459 475 16 3,5% Romania 260 270 10 3,8% Austria 249 250 1 0,4% Slovakia 147 147 0 0,0% Belgium 147 147 0 0,0% Bulgaria 22 28 6 27,3% Portugal 12 12 0 0,0% Netherlands 2 2 0 0,0% European Union 29.090 30.476 1.386 4,8% Ukraine 380 380 0 0,0% Russia 300 350 50 16,7% Turkey 297 297 0 0,0% Belarus 58 60 2 3,4% Switzerland 17 17 0 0,0% Other European countries 1.052 1.104 52 4,9% EUROPE 30.142 31.580 1.438 4,8% USA PNW 20.582 21.908 1.326 6,4% USA except PNW 988 1.188 200 20,2% USA total 21.570 23.096 1.526 7,1% Argentina 167 153-14 -8,4% Canada 137 155 18 13,1% AMERICA 21.874 23.404 1.530 7,0%
China 2.639 2.600-39 -1,5% Japan 133 122-11 -8,3% ASIA 2.772 2.722-50 -1,8% South Africa 395 421 26 6,6% AFRICA 395 421 26 6,6% Australia 546 631 85 15,6% New Zealand 412 442 30 7,3% AUSTRALIA /OCEANIA 958 1.073 115 12,0% WORLD 56.141 59.200 3.059 5,4% * estimated A number of countries are again expanding acreage in 2017. The biggest increase is again seen in the US, which are now, with a strung area of 23.100 ha, the largest producing country by a long distance. In Germany the acreage increases by nearly by 1.000 ha as a result of the increasing demand for hops worldwide. II. Germany variety 2016 2017 change ha % ha ha Perle 3.093 2.966-127 -4,1% Hallertauer Tradition 2.827 2.704-123 -4,4% Hersbrucker Spät 940 916-24 -2,6% Tettnanger 732 747 15 2,0% Hallertauer Mittelfrüher 733 723-10 -1,4% Spalter Select 534 532-2 -0,4% Saphir 450 473 23 5,1% Mandarina Bavaria 346 356 10 2,9% Amarillo - 280 280 Hallertau Blanc 154 170 16 10,4% Huell Melon 134 157 23 17,2% Opal 140 141 1 0,7% Saazer 113 137 24 21,2% Spalter 119 121 2 1,7% Other Aroma 218 346 128 58,7% Total Aroma 10.534 10.767 233 2,2% Northern Brewer 266 300 34 12,8% Brewers Gold 17 16-1 -5,9% Total Bitter 283 315 32 11,3% Herkules 4.884 5.797 913 18,7% Hallertauer Magnum 2.196 2.011-185 -8,4% Hallertauer Taurus 357 284-73 -20,4% Polaris 106 174 68 64,2% Nugget 152 131-21 -13,8% Other High-Alpha 28 25-3 -10,7% Total High-Alpha 7.722 8.422 700 9,1% Other 59 39-20 -33,9% GERMANY TOTAL 18.598 19.543 945 5,1% Source: deutscher Hopfenpflanzerverband
Germany reacts to the rising demand for bitter hops with a significant expansion of the Herkules variety, which increases by more than 900 ha as well as Polaris as a second pillar in the high alpha segment. The planting of 280 ha of the US flavor variety Amarillo is also noteworthy, which is grown in Germany for the first time. The number of hop farms continues to decrease by 22 to a remaining total of 1.132. IIa) forward contract ratios for German varieties As can be seen in the graph below, most volumes produced in Germany are already under contract based on average production yields. 100 % contracted 90 80 70 60 50 40 30 20 10 0 III. HPE HSE HHT TTE HTU HNB HHE HHM HHS 2017 2018 2019 2020 2021 USA: Pacific Northwest States (WA, OR, ID) Varieties 2016 2017 Difference ha ha ha % Cascade 3.068 2.896-172 -6% Centennial 2.095 2.240 145 7% Citra 1.819 2.219 400 22% Simcoe 1.753 1.820 67 4% Chinook 785 983 198 25% Other Aroma 6.572 6.922 350 5% Total Aroma 16.092 17.080 988 6,1% Columbus-Tomahawk-Zeus (CTZ) 1.820 2.004 184 10% Summit 716 658-58 -8%
Nugget 666 592-74 -11% HBC 682 110 400 290 264% Other High-Alpha 1.178 1.174-4 0% Total High-Alpha 4.490 4.828 338 7,5% USA (PNW) TOTAL 20.582 21.908 1.326 6,4% Source: US Department of Agriculture (USDA) The US expands its acreage by 1.326 acres. What is new is that the US, after having well supplied the market for flavor hops, are again turning their attention to the high alpha segment and are reversing the trend of years past when grubbing was the name of the game. First and foremost the planting of a newly bred variety, HCB682 is responsible for the expansion in this segment. IV. Plant growth and development: Germany Growing conditions in Germany were characterized by constantly changing conditions from cold and wet to hot and dry. At the end of May plant growth is close to normal development and plants are generally healthy. Precipitation and Temperature for Hüll, Wolnzach USA The generally cool and moist ground conditions provided hop roots with the proper environment for strong growth and normal plant development in the early stages of the growing season. Baby plantings are slightly behind in development while most mature fields are on schedule. Training of the vines was completed within the normal timeframe. Overall the crop looks very good in the early stages with all indications of a good crop at this point. Poland, Slovenia and Czech Republic
At the end of May, growth was a bit behind the longterm average but is expected to catch up thanks to warm conditions at the beginning of June. Pest control measures were undertaken in the normal realm. In Slovenia an area of 100 ha was affected by hail, but we do not expect a material effect on the total crop outcome. V. Market outlook: The 2016 hop crop did bring the expected détente in the flavor hop segment. Even the very sought after US flavor varieties (Citra, Amarillo, Simcoe, etc.) were available in the necessary amounts. Fine aroma hops from Europe, e.g. Czech Saaz, were available on the spot market for the first time in various years thanks to record yields. The only exception was the Galaxy TM variety from Australia which yielded below expectations in both crops 2016 and 2017 with just enough being harvested to meet contracts. Despite the above average yields of Perle and Hallertau Tradition the extra volumes were quickly absorbed by the spot market at very stable prices. This leads to the assumption of a structural shortage in these two varieties. Parallel to the softening of the flavor segment we noticed a clear tightening of the high alpha market. Several years of acreage reductions of high alpha varieties in the US have clearly resulted in a structural deficit in this segment. Only thanks to stocks from previous crops was it possible to satisfy worldwide demand. Hop production has already reacted and expanded acreage of these varieties in 2017, but full yields will not be available from these baby fields in the 2018 brewing year. The crop outcome will therefore be of utmost importance for how the market evolves. We forecast a more or less balanced supply and demand in terms of alpha always average yields and alpha acid contents provided. However, we need to look at each submarket individually. There are clear signals for a tightness in the high alpha segment where almost the full production is already under contract. The situation in the aroma segment needs to be looked at variety by variety, where market conditions range from well supplied to rather tight. We are closely observing plant development and growing conditions and will report again in case of events that materially affect the market outlook. The BARTH-HAAS GROUP