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Unlike commercially produced beer that’s made in huge amounts and then canned or bottled, craft beers are made in small batches with close attention to flavor. This has led to an increase in the demand for hops.
Most beer has just four ingredients: grain, hops, yeast and water.
Barley is a grain grown in fields of farmland, but you may not be as clear on what, exactly, are hops.
Hops are used as flavoring elements in the small batch beer-making process. They are actually a green cone-shaped perennial flower with little yellow pods. These pods contain resins and essential oils that give beer its unique scent and taste.
Depending on how they are used, the resins and oils can be floral, citrus, woodsy, herbal, bitter or fruity depending on the crop and the type of beer a craft brewer is looking to produce. Hops are a hardy plant that grow upward like a vine and need trellises to latch on to.
Some people are smaller-scale hops farmers who grow the plant for their own home brewing craft beer activities.
But other investors see hops farming as a longer-term, investment opportunity.
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How Much Will Starting A Hops Farm Cost?
Larger scale, commercial hops farms can consist of 100 acres or more.
For the purposes of this discussion, we are delving into your potential profits per acre of hops plants.
Let’s assume you are starting from scratch with your hops farm investment. It will cost you around $12,000 per acre to get started on your hops farm. The cost is somewhat high because it includes farming from start to finish, such as plants, trellises, irrigation, labor and equipment.
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|$8,000+||View Investments||Yes||US Farmland, Timberland, Vineyards|
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How Much Can You Earn?
Smaller scale or specialty crops are in high demand and can wholesale for as much as $16 per pound or more depending on market conditions.
Let’s break it down even further. In recent years, the average yield of dry hops in the US was about 2,000 pounds per acre.
Therefore, you can estimate earning approximately $32,000 per acre of hops given ideal conditions including prime weather and a continued high market value and high demand for hops.
While there could be a lot of money to be made in hop farming, keep in mind that the basic laws of supply and demand still apply to this agricultural commodity.
Demand is high right now, since craft breweries are booming. However, that trend could change in the future. Hop farm investors will want to pay close attention to craft beer trends.