Beer crisis: Less thirst for beer is plunging hop farmers into existential difficulties

Although Germany has just become the number one hop country in the world again, hop farmers are preparing for lower market prices, company closures and the clearing of thousands of hectares of hop gardens. He assumes that 2,000 to 3,000 hectares of the total cultivated area of ​​a good 20,000 hectares in Germany will have to be eliminated, said the chairman of the German Hop Industry Association, Pascal Pirouè, at the BrauBeviale industry trade fair in Nuremberg. Industry representatives cited the decline in beer consumption over the years, the challenges posed by climate change and miscalculations by the world’s leading brewing companies as reasons.

The 2024 harvest was above average with 46,536 tons of hops thanks to predominantly good weather conditions; the lion’s share of around 41,000 tons came from the Bavarian growing regions of Hallertau (40,300 tons) and Spalt (700 tons). For comparison: Cultivation in the USA, where the craft beer wave has subsided and milder beers are increasingly being drunk again, the area under cultivation fell by 18.5 percent within a year, and only just under 40,000 tons of hops were harvested.

Nevertheless, difficult years lie ahead for hop farmers in Germany too. “It is to be expected that after the 2025 and 2026 harvests, there will also be significant declines in area and operational closures in Europe,” says Piroué. He sees the adaptation potential worldwide at 5,000 to 10,000 hectares. In 2024, for the eleventh year in a row, more alpha acid – the hop component that is responsible for the bitter taste in beer – was produced than needed. The result is a drop in prices.

So far, this has been partially offset because the breweries – 99 percent of hop buyers – secure their goods through long-term contracts. If these expire in the next few years, it could create further holes for farmers. In addition, the breweries have already ordered more hops than they can process and some are not purchasing their quotas or are not purchasing them in a timely manner, as the President of the Association of German Hop Growers, Adolf Schapfl, explained. “In some cases prices have fallen by 90 percent in the last two years,” said Schapfl. “An economical cultivation of hops is absolutely not possible in this way. The result will be that many hop-growing families will give up,” he explained.

There is also the problem of climate change. According to Schapfl, farmers will have to change their variety portfolio in the future because of the higher temperatures and less precipitation in order to bring more adapted plants into the soil. Above all, more water is needed. Pilot projects are already underway in the Hallertau and Spalt with irrigation associations that have developed systems in which excess surface water is stored and used to irrigate crops in summer. The association president spoke of “generational projects” that needed to be tackled.