Mainebiz

W W W. M A I N E B I Z . B I Z 15 M AY 1 6 , 2 0 1 6 according to U.S. Department of Agriculture and Hop Growers of America statistics. e United States is the top hop producer in the world with 45,238 total acres produced, followed by Germany with 44,102 acres. One of the challenges Maine and other hop growers face, says UMaine's Plant, is the cost of entry. "It costs about $10,000 to $20,000 per acre to get started," he says. "It's such an expensive endeavor to get into with the trellising and capital investment." On top of that, it's a labor-intensive flowering crop, and susceptible to downy mildew, which, if not caught in time and treated with chemicals, can ruin an entire harvest. Houghton says he regularly checks his hop plants, which grow on 18-foot poles and wires. When the shoots reach the top of the poles, they stop grow- ing vertically and start filling in horizontally. All the hop shoots need to be cut down to the ground in the spring to produce better sprouts. e hop flowers need a lot of water and nitrogen to grow, Houghton says. It takes about 125 days for the hop cones to fully ripen, and they're typically cut by hand all at the same time. Houghton says e Hop Yard is self-funded, plus it received a $40,000 loan from the Finance Authority of Maine to buy a picker — known as a "Hopfenpflückmaschine" in Germany, where his picker was made — and a $25,000 grant from the Maine Technology Institute that it matched with $25,000 to buy a dryer. When the farm expands, it may seek angel or other financing, Houghton says. Founded in 2010, it turned a profit last year. Currently, e Hop Yard sells some fresh or "wet" hops once a year to local brewers for special seasonal blends, but the bigger business going forward is dry, frozen hops that could be shipped. ose could make up 80% of e Hop Yard's business going forward, Houghton says. Local customers include Rising Tide, Sebago Brewing Co. and Allagash. Houghton says he hopes to create a meaningful hop industry in Maine. "Right now, Maine is using a ton of hops and that's only going to go up," he says. "We know it can work here because the climate is right. It could be a big industry here and it allows farmers to diversify." Maltsters need to double or triple production Farmers also stand to make more money in pro- ducing malt-grade barley, says Alex of Blue Ox Malthouse. He estimates that without a middle- man, farmers can get 30% to 50% more per grain than what they would otherwise get. Currently, most malt, which is made primarily from barley but can use other grains like wheat, is imported. UMaine's Plant estimates that Maine's brewers import 30 million pounds of malt made from barley each year for the approximately 300,000 bar- rels of craft beer they collectively produce each year. "If Maine farmers were to fully supply all of the barley for malt being used in the state, they would need to produce 7,500 to 10,000 acres of malt-grade barley," Plant says. at's double to triple the esti- mated 2,000 to 5,000 acres grown now. Maine is the largest barley-producing state in the Northeast, and is a large producer of small grains like wheat, rye and oats that also are used to make malt, but much of those grains are exported for animal feed, which gets a lower price, Alex says. Besides water, malt and hops are the key ingredients in beer. Like the hop flower, growing malt-grade barley — which requires up to 100% of the grains to sprout — can be difficult due to that high-quality specification, the growing season and disease pressure, Plant says. And the investment is high: Alex says he's already pumped nearly $1 million into his malt house, which uses the traditional floor-germination process of laying the barley in water on the floor and letting it sprout, while raking it routinely to remove excess carbon dioxide and heat. Jacob Buck, marketing manager at the Maine Malt House, says farmers still need to be convinced to switch to growing the finicky malt-grade barley. "But it will be appealing to farmers if they realize they can make money off of the grain." He says market demand for the high-quality barley in Maine is still in its early stages, but he's selling to 16 or 17 local brewers who are regularly using his malt, which comes from the 200 acres of barley he grows for Maine Malt House. He says he also sells some barley to Blue Ox Malthouse. So far, local malts and hops come at premium prices, say Houghton and Alex, but brewers have been willing to pony up because of the "buy local" trend and the desire to have different flavors. Says Plant, "It would be a win-win if local Maine farmers could grow local barley for local Maine malt for local Maine beer." Lori Valigra, Mainebiz senior writer, can be reached a t l v a l i g r a @ m a i n e b i z . b i z a n d @ LVa l i g r a It's time to get your MBA Maine Business School Internationally accredited by AACSB since 1974 A UMaine MBA features: • A 30-credit program that makes it possible to have a job and get an MBA • World-class, expert faculty offering an engaged MBA experience • Dedicated online student support services • Flexibility of attending class on your schedule • Competitive tuition rates The University of Maine is: • Ranked in Tier 1 of America's Top National Universities (Report, 2013, U.S. News & World) • A premier research institution, nationally and regionally accredited • Maine's only land-grant and sea grant university Learn from world-class faculty on your schedule. Contact an advisor today! 207.581.5858 • umaineonline@maine.edu umaine.edu/online The University of Maine is an equal opportunity/affirmative action institution

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