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Yakima Valley hop growers benefitting from surge in growth of craft-brewing industry

As craft beer comes to rival quality wine as a palate pleaser for the discriminating, the hop industry whose bitter green cones give the beer its special taste is surging and thus playing an increasingly important role in the economy of the Valley and also Washington State.


The fields of grapes for Washington's successful and growing wine industry are spread across the Yakima Valley while the fields where the hops are grown are far less visible and the acres less numerous. But the fact is that hop growers and their industry, by far the largest in the nation, predate the wine industry by several decades.

Now the hop industry, after years of ups and downs that were mostly downers, is riding a growth wave thanks to the surging popularity of craft beer, most of which is brewed with hops from the Yakima Valley.

"The hop industry is booming right now and adding huge value to the Yakima Valley economy," says David McFadden, president of the Yakima County Development Association. "We are seeing hop processors purchase new buildings, add new equipment and boost local payrolls. Agriculture is very strong right now and hops are complementing our farmers' livelihoods." 

Ann George

For comparison, it's important to note that the hop industry's approximately $160 million annual contribution to Washington's economy is only 14th on the state's agricultural-products values and just a slice of the $2.25 billion annual production of the number one apple industry. But as McFadden notes, the industry's surge is bringing other benefits as well.

"The past few years have been an exciting up and thus a nice change for the industry," notes Ann George, who has been the chief administrator for the Washington Hop Industry association for 27 years and also serves as the chief administrative person for the Hop Growers of America.

"The success of the industry in the past few years has attracted back some of the young talent that had moved away from the farms," she adds, noting that many of the farmers are adding hops to their agricultural-product mix, with the acreage dedicated to hops being between one-quarter acre and 10 acres.

George is in Austria this week for the annual summer gathering of the International Hop Growers Convention, the global organization for hop growers where she chairs what may be the most important commission, called the Commission on Regulatory Harmonization. She thus is the global organization's key person in dealing with the trade and pesticide rules that are the primary challenge for craft brewing as the industry becomes ever more attractive globally, thus adding countries into which hops are sold.

George, one of whose duties is tracking statistics for the industry, says 74 percent of the 2014 hop crop will be from acreage in Washington State, 14 percent from Oregon (virtually all of that produced in the Willamette Valley) and 10 percent from Idaho.

Almost 90 percent of the U.S. hop production is exported to other countries, where craft-brewing industries are either already in existence of where the industry is beginning to take shape.

Most hop farmers in the Valley are third or fourth generation and one of the largest and best-known of those is B. T. Loftus Ranches, which began in 1932 when the first five acres of hops were planted by the great grandparents of current owners Patrick Smith, Meghann Quinn, and Kevin Smith.


The Bale Breaker Brewery, smack in the middle of the Lofus hop fields, opened in April of 2014 as the latest Loftus venture.


Germany, which produces 60 percent of the world's hops, and the Yakima Valley, which produces 25 percent of the world crop and 80 percent of the U.S. hop crop, are the two most noteworthy geographic areas for hop production.

Pete Mahony


Thus it's natural that there would be a convergence in some manner for the two most noted hop-producing regions. And the convergence is the decades-long presence in the Yakima Valley of the U.S. arm of the Barth-Haas Group, the world's largest supplier of hop products and services. Barth-Haas, founded in 1794, is now managed by the seventh and eighth generations of the Barth family and has roughly a 30 percent share of the hops market in Germany.

The U.S. arm of the company, John I. Haas, Inc., which owns and operates its own hop farms, warehouses, pellet and extraction plants and has been a fixture in the Yakima Valley hop industry for some 70 years, next month celebrates its 100th birthday.

Peter Mahony, who is Director of Supply Chain Management for John I. Haas, Inc., and has been with the Washington, D.C., based company for 28 years, explains that hops are "the spice of beer," giving the brew its flavor. And craft brewers use about 6-to-8 times as much hops as major brewers and their brews use one of the variety of what are called aroma hops, that magnify the beer flavor, whereas brewing used to involve what is known as alpha hops, still the primary hop for major breweries.

Mahony notes that acreage devoted to aroma hops in the Yakima Valley has become about 60 percent of the annual harvest, which extends from late August to early October and involves about 29,000 acres in the Yakima area with the average size farm about 450 acres on which hops are one of several crops grown.

Mahony, who says the 1,500 acres that Haas farms in the Valley is one planted in hops, expects that the growth of craft brewing and thus the health of the hop industry and its aroma varieties will continue, "but for how long is the million-dollar question."

He points to the attendance at the annual craft-brewers conference as a cause for long-term optimism for hop growers, noting "attendance at this year's crafters' conference was up 40 percent over the year before, to more than 9,000 attendees."

If there is any doubt that craft brewing is attracting a whole new generation of beer consumers around the globe, it should be dispelled by the advise from a beer sommelier at a Barth tasting event in Germany.

To those who might not be familiar with the fact there are beer sommeliers, Ann George makes the point that "more and more hospitality groups have a beer sommelier as well as a wine sommelier."

As the sommelier quotes puts it: "You shouldn't drink our beers when you're thirsty. Our beers should be drunk in small quantities on special occasions."

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Rural economic development a key focus of Global Entrepreneurship Week in this state

At a time when many rural communities in Washington State and elsewhere are sensing a growing disconnect from urban centers, the most intriguing aspect of Global Entrepreneurship Week (GEW) as it unfolds next month in this state may well be the efforts to assist entrepreneurs in rural areas.


GEW activities that will occur in virtually every corner of this state, events in big cities and small towns, will provide entrepreneurs an opportunity to seek advice, counsel and even start-up funding as Washington State takes a leading role in the world's biggest celebration of innovation and entrepreneurship.


Most of the activities relating to GEW, which is sponsored by the entrepreneurism-focused Kauffman Foundation, are during the Nov. 18-24 designated week for GEW.

Maury Forman

The emphasis on rural entrepreneurism is due to the man responsible for the GEW events in this state. Maury Forman is senior manager at the State Department of Commerce and the state's leading advocate of rural economic development as the head of rural strategies.


Forman explained his rural focus this way: "Economic development has changed.  It used to be that people went where the jobs are. Now the jobs are going where the people are and that will allow many rural communities to become more competitive."


"Economic growth in rural areas is going to come from communities growing their own businesses through programs supporting entrepreneurs rather than coveting someone else's business," said Forman.


That represents a point echoed by others that rural communities long guided by the goal of luring businesses to move to their towns need to replace that largely frustrating goal with initiatives to create entrepreneurial support services that will help foster job creation.


The old economic development model of expending time and resources to attract new business to move to an area isn't exactly dead for many rural development organizations. But it is giving way dramatically to initiatives that are, as David McFadden, the Yakima Valley's economic development leader, puts it: "building our economy from within."


Thus McFadden's Yakima County Development Association has put together a couple of innovations that "represent a new wave of thinking about economic development, making an emphasis on quality of place more important than ever."


 McFadden's group has adopted a two-part entrepreneur development strategy "recognizing that emerging companies are important drivers of local economies."


An annual business plan contest launched four years ago to identify and nurture promising companies has attracted more than 50 start-up firms to participate in a process that includes employing SCORE volunteers for three-month seminars.


"The other strategic initiative is to help local employers attract technical and professional employees into the region," McFadden said. "This is a huge business retention issue as our businesses struggle to fill key positions."


A key part of GEW events in Washington is the day-long Rural Pathways to Prosperity, being put on in 13 mostly rural communities across the state by the Washington State University Extension Service.


Becky McCray, a national expert on changing the entrepreneurial climate, will provide the keynote broadcast on a live webinar to the various communities with a focus on guiding participants to understand how to create small business ecosystems.


The conference is an outgrowth of Forman's conviction that the focus needs to be "not on entrepreneurs but on creating entrepreneurial communities with workforce programs and technical assistance, infrastructure that provides communities a better chance of retaining entrepreneurs."


"High school kids really want to stay in their own communities and building entrepreneurial communities creates a better chance for students to do that," he said.


Students will be among the various target audiences for Pathways to Progress organizers in the various communities, but Prosser and Colville are two communities that will have specific initiatives aimed at attracting the involvement of high school students.


Prosser High School has created a contest for high school students to produce a poster board for judges detailing their product, the target market, how the product would be manufactured and how they would make money.


And at Colville High School, eleven vocational programs from Colville High School in Stevens County will run a contest for students to develop an entrepreneurial business plan in a particular field.


A fast-growing entrepreneur-focused program that is now headquartered in Kirkland and, under the sponsorship of Google has developed a global reach, is Fast-Pitch Weekend, a 54-hour fast dash to organize a start-up business.


It's not really tied to GEW and is held this coming weekend around the country with groups of developers, business managers, startup enthusiasts, marketing gurus, graphic artists and others pitching ideas for new startup companies, forming teams around those ideas, and seeking to develop a working prototype or presentation by Sunday evening.


The organization estimates that, as of last April, more than 1,000 events had been held, involving more than 100,000 entrepreneurs in more than 400 cities around the world, creating an estimates 8,190 startups.


How important are entrepreneurs to the economy and thus economic development? The Kauffman Foundation says statistics show that entrepreneurs who have only been in business for one year have already created one million jobs this past year alone, adding that "their contribution will be able to replace obsolete business and create new wealth and opportunities to existing and future residents.

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