Small landowners with a desire to cultivate a crop have increasingly investigated and invested in hops production in Michigan. Because it’s a capital-intensive crop, multiple factors must be considered just to get started.
The costs to get a crop in the ground can amount to as much as $17,000 an acre. There’s also annual input costs and labor.
Then, at harvest the delicate flowers must be processed within eight hours — dried, baled and put into cold storage. The hops is then pulverized and pelleted, and moved back into cold storage. This process has been a challenge for hops growers trying to harvest and process at the same time.
One of the early hop growers in Michigan, Pam and John Miller in Greenville, put in one of the largest hop yards in the state in 2012. Their 10 acres called Hopyards of Kent, later expanded to 13. They purchased a 30-some-year-old harvesting machine from Germany and developed a plan to give other producers easy access to processing. They processed the crop and returned it to growers. The shortfall for some growers was the ability to market their crops.
The Millers had nine brewers as customers at the time, but they saw an opportunity to advance the industry for all growers.
In early 2015, the Millers approached Jim Parks, who has close to 25 years of experience in management and alcohol sales with two different Michigan companies. “They had the idea of developing a brokerage for Michigan because nobody else was doing it at the time,” says Parks, who had built many relationships with brewers in the past.
“We met with growers and presented the idea that if they grow the product, I’d sell it throughout the country and beyond,” he says. “But unlike other hops brokerages out West, we would not only package by variety, we would package and identify each farm that it came from.”
The Millers broke off their processing and sales part of business, and in 2015, United Hops Brokerage was formed to complete the final leg of processing — crushing, pelletizing and frozen storage. Parks purchased final processing equipment from Nova Scotia and a 7,000-square-foot building on 5 acres of property in Eureka Township in Greenville.
Just 300 yards away, the Millers established the Hops Harvest Center, which handles the hops straight from the growers’ fields, completing the drying and baling, before going to UHB.
United Hops Brokerage, which is licensed and inspected as a food processor, started with 15 growers and seven hop varieties. In just two years, that has grown to 45 growers and 25 varieties. In 2015, UHB was processing 9,000 to 10,000 pounds; it’s now at 35,000 pounds and growing.
ID LABEL: Every box of hops is labeled to identify several aspects of the product, including the exact farm it came from.
While the two companies are completely separate, UHB contracts with the Hops Harvest Center, not only for product, but for services.
Pam Miller, who has put in hours of research into the best practices for hop production, is a go-to resource for growers.
“Quality, consistency and availability are what customers [brewers] want,” says Miller, who has become known as a hops expert and has been a featured speaker at many conferences throughout the country. “Quality is the only thing we accept.”
To ensure quality, UHB contracts with Miller to educate growers. That means all growers who supply to UHB attend preseason grower meetings and get updates from Miller and other experts. Miller then visually inspects the 27 farms currently growing for UHB throughout the growing season. Each farm is graded.
To allow for more time on this side of the business, the Millers sold their hop yard to another farm in the area.
Expanding business
To sell more product, salespeople have been added in Florida, Colorado, Minnesota and Michigan. “Right now, our out-of-states sales are only about 15%, but we’re looking to grow that throughout the U.S. and internationally,” Parks says. “Internationally, they are thirsting for American hops; they cannot get enough right now.”
CUSTOM BAGGING: Customers of UHB like that they are able to order custom-sized bagging.
On a recent trade mission, Miller represented UHB and met with the No. 1 hops brewer in China. “We are very interested in overseas markets, but we know the process is a learning curve, and it’s going to be a minimum of six to 18 months to develop relationships with buyers and logistics for sales into that country,” Parks explains. “Once developed, I see it as a long-term relationship.”
Parks says by being a broker and merchandiser and not a grower, it allows him to get to market quickly. “I’m not bogged down with harvest,” he says. “It allows the product to go right to processing.”
While five other hops brokerages now exist in Michigan, UHB is unique in that it identity-preserves the product by farm.
The packaging of UHB-processed hops contains the name and logo of the hop yard it came from, the year it was harvested, variety, poundage and lot number. All hops are a sent to a credited lab, and the package also includes the alpha beta number, hop storage index, oil levels and other specific information.
Cascade and Chinook are the two most abundant hops grown in Michigan, and therefore, Parks says they are not asking for those varieties right now, but are looking for other options to offer brewers.
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