Farmers find successes and setbacks growing niche commodities for craft breweries | Michigan Farm News

Farmers find successes and setbacks growing niche commodities for craft breweries, cideries

Category: People, Markets & Weather, Crops

by Mitch Galloway | Farm News Media

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GRAND RAPIDS — Successes and setbacks are commonplace for farmers entering the agritourism industry.

In Sean Trowbridge’s case, the growth of the hop-growing industry in the late 2000s led to his start-from-scratch hops farm in 2012. Despite successes early on, Trowbridge is now dealing with the saturation of the hops market, which he said brings on many new challenges for smaller local farms related to pricing and variety selection.

Trowbridge’s circumstances are similar to other Michigan farmers looking to grow and distribute value-added niche commodities for craft breweries. According to the Brewers Association, a Boulder, Colo.-based trade association for craft breweries, Michigan ranks fourth nationally in the number of craft breweries (330), up from roughly 100 breweries in 2011.

With more players entering the craft beer industry — e.g., hop farmers, brokers and/or merchants — Trowbridge said he’s had to adjust to consumer demands, such as reducing a hop’s price that’s widely available on the spot market.

“From what I can tell, nothing is ever in perfect balance,” said Trowbridge, farm manager of Top Hops LLC, a Goodrich-based hop grower that sells about seven varieties of hops to roughly 50 breweries in Michigan. “Consumers drive trends in the craft beer market and brewers try to react to their consumers' demands. This means specific hop types, and when chasing fads, often times there are varieties that fall out of favor. This is one way an overproduction can occur or at least an oversupply that leads to price reduction when the varieties in the ground do not match with the varieties in demand.

“Since Michigan itself is a niche market for hops … you really need to pay attention to the main hop growing regions of Washington, Oregon, Idaho … in regards to market pricing and availability of specific hops.”

Trowbridge and two other Michigan farmers described their successes and setbacks of adding alcohol-related niches to their farm operations during the recent Michigan Farm Bureau Growing Together conference in Grand Rapids.

For Trowbridge, the hops industry seemed like the viable crop to earn a profit, especially as the craft beer industry began to “expand rapidly in Michigan” in 2008-09, he said. Yet, by adding or creating new business, there are always some hurdles to overcome.

“We didn’t have a lot of acreages,” he added. “We wanted to do something like a specialty crop, so we went to some seminars at MSU and saw a couple other farms. We put together a business plan … and I decided to work 80 to 90 hours a week so I didn’t have to work 40 hours a week.”

Though Trowbridge laughs now, he said the transition to a new commodity — or starting one from scratch, in his case — consisted of hard work, money and time.

Still, if done right, Trowbridge said agritourism could be a good way for a farm to “complement” its production of hops, grapes, honey, and/or orchard fruits.

“I would say do your homework and be as knowledgeable about the business as you can before making a decision,” said Trowbridge, a Genesee County Farm Bureau member. “Put together a business plan, try to schedule some farm visits to hop farms in production, look to see who or where you would be selling the hops, and review all resources available ... There is a lot of initial costs to hop farming and the payback is long and slow.

“For us, we didn't have a lot of available lands, so any sort of row cropping or traditional ag was out of the option for us with our farm.”

Similarly, Nicole Ward of Forgotten Ciders LLC is spending “a lot of time and money” at her cidery in Wheeler, Mich.

“We looked at value-added products where we could eventually get more dollars,” Ward said. “We were home-brewing our own cider and doing a pretty good job at it, so we then decided to commercially make cider.”

According to Ward, Forgotten Ciders creates cider using apples from the family’s apple orchard, Eastman’s Antique Apples. There, the family has a tasting room on the orchard’s property that offers an “authentic experience” for consumers.

“We’ve always been conservative in how we started and grown the business,” Ward said. “ … Only using our apples limits us, especially when some of our trees are biannual … and our tasting room is open only seasonally. So it’s a challenge, but it’s a challenge we wanted to take on.”