Cost of Growing Hops in the Northeast

Introduction:
As demand grows for hops in the Northeast, many farmers and entrepreneurs are thinking about the possibility of growing
hops. Since this crop has been absent from the region for over a century, information is not readily available about the
costs of hop production. This document is intended to help prospective hop growers consider the financial side of hop pro-
duction. It complements an editable spreadsheet that you can use to model your hop farm available on the UVM Extension
website¹. The numbers included are based on interviews with Northeast hop growers in 2015. It is important to note that
while the numbers are based on real businesses, your business may end up looking very different. This could mean that
certain parts of the business could be more expensive than stated here; it also could mean that you can find cheaper ways
to do things. All growers in the Northeast are developing their production systems and working on making them more
efficient, including the growers interviewed in this project.

Context:
Washington State Extension and Michigan State Extension have created well done financial examples that can be found
online². This document is intended to provide a regional version based on New England and New York, and to add de-
tail on processing equipment and labor costs. While processing infrastructure carries a high capital cost, it can be spread
out over the lifetime of the equipment. The entire startup cost of the 10-acre yard example including posts, hardware,
spraying equipment and harvesting equipment is $1,721.30 per acre, while labor is double that at $3,495.00 per acre. The
highest costs per acre across all growers interviewed were weeding and harvesting labor. From a financial perspective,
the biggest improvements can be made from systems that cut labor time and by increasing hop yield. Yields in the Pacific
Northwest are as much as double the yields in this region for some varieties, so we know that it is possible to get more
hops per acre. For information on how to achieve better yield, visit our website at http://www.uvm.edu/extension/crop-
soil/hops.

Growing practices:
Interest in Vermont has leaned toward organic growing practices, which is reflected in the model. However, informa-
tion is included below on cost of conventional fertilizer and pesticide per acre. Those numbers can be substituted in the
spreadsheet if you would like to model conventional costs. It is worth noting that interest in organic production practices
has been mostly driven by growers; the regional hop market does not currently have a strong preference between organic
certified hops and conventionally grown hops.

Not Covered in budget:

This model does not include water sourcing. Where will your irrigation water come from? Drip irrigation and infrastruc-
ture for distribution across planted area is included, but will you need to run water to the yard? Are you paying for a well
or for city water?

The business loan is calculated for a 20-year pay off. If cared for properly, hop plants, trellis and harvest/processing equip-
ment could last for 20 years, but demand for a given hop variety often does not. Driven by demand, it is likely that you
will want to replant with new hop varieties before the plants actually need replacing. That is why estimated net income is
not forecasted for the full 20 years of the loan. To change the loan payoff period, go to the “business loan” tab of the Excel
spreadsheet. Changes to that sheet will be reflected on the main budgets.

¹http://www.uvm.edu/extension/cropsoil/hops
²http://msue.anr.msu.edu/uploads/234/71501/MI_Hops_cost_of_production_Bulletin-E3236.pdf
²http://cru.cahe.wsu.edu/CEPublications/FS028E/FS028E.pdf
Sample Budget for 10 Acre Hop Enterprise
Julian Post, UVM Extension

Income
Unit Number Price per Total Yield per acre
Dry pelleted hops dry lb 10,000 $15.00 $150,000.00 1000
Total Income $150,000.00

Expenses
Sample Budget for 10
Variable Acre Hop Enterprise cost per acre
Julian
Coir Post, UVM Extension bale 8 $500.00 $400.00 $4,000.00 2500 strings per bale
W-clips acre 20 $50.00 $100.00 $1,000.00 1000ct box
Income
Fertilizer ton 7 $621.00 $434.70 $4,347.00 1,250lbs/acre Cheep Cheep (4-3-3) for 200# N/planted acre (50# N/actual acre)
Fungicide OG Unit
20# bag Number
3 per
Price$160.00 $48.00 Total
$480.00 per acre
Yield6lbs/acre
Dry pelleted
Herbicide OGhops dry
5 gallon
lb barrel 10,000
10 $15.00
$260.00 $260.00 $150,000.00
$2,600.00 1000
2 applications @ 2.5 gallons/acre
Total Income
Training - Labor hours 400 $15.00 $600.00 $150,000.00
$6,000.00 40hrs/acre
Stringing - Labor hours 120 $15.00 $180.00 $1,800.00 12hrs/acre
Expenses
Weed control - Labor hours 800 $15.00 $1,200.00 $12,000.00 hand weeding, trimming, and herbicide
Variable
Spraying - Labor hours 450 $15.00 cost per acre
$675.00 $6,750.00 4hrs/week x 15 weeks
Coir
Tractor fuel for field work bale
acre 8
10 $500.00
$420.00 $400.00
$420.00 $4,000.00
$4,200.00 2500 strings per bale
W-clips
Oast Fuel acre
season 20
1 $50.00
$879.00 $100.00
$87.90 $1,000.00
$879.00 1000ct box
Fertilizer
Harvester Fuel ton
season 7
1 $621.00
$1,000.00 $434.70
$100.00 $4,347.00
$1,000.00 1,250lbs/acre Cheep Cheep (4-3-3) for 200# N/planted acre (50# N/actual acre)
Fungicide OG
Harvest - Labor 20# bag
hours 3
400 $160.00
$15.00 $48.00
$600.00 $480.00
$6,000.00 6lbs/acre
Herbicide
Post-harvestOGprocessing - Labor 5 gallon barrel
hours 10
160 $260.00
$15.00 $260.00
$240.00 $2,600.00
$2,400.00 2 applications
200 cutting, 200 picking, 100 2.5 gallons/acre
@drying, 60 baling
Training - Labor
Pelletizing - contracted hours
lb 400
10,000 $15.00
$1.50 $600.00
$1,500.00 $6,000.00
$15,000.00 40hrs/acre
Stringing
Packaging- -Labor
contracted hours
lb 120
10,000 $15.00
$0.65 $180.00
$650.00 $1,800.00
$6,500.00 12hrs/acre
Weed control - Labor
Total Labor hours 800 $15.00 $1,200.00
$3,495.00 $12,000.00
$34,950.00 hand weeding, trimming, and herbicide
Spraying - Labor
Total Variable (including labor) hours 450 $15.00 $675.00
$7,495.60 $6,750.00
$74,956.00 4hrs/week x 15 weeks
Tractor fuel for field work acre 10 $420.00 $420.00 $4,200.00
Oast
FixedFuel season 1 $879.00 $87.90 $879.00
Harvester
Rent Fuel season
acre 1
10 $1,000.00
$150.00 $100.00
$150.00 $1,000.00
$1,500.00
Harvest - Labor
Insurance hours
year 400
1 $15.00
$1,200.00 $600.00
$120.00 $6,000.00
$1,200.00
Post-harvest processing - Labor
Taxes hours
year 160
1 $15.00
$1,000.00 $240.00
$100.00 $2,400.00
$1,000.00 200 cutting, 200 picking, 100 drying, 60 baling
Pelletizing
Total Fixed- contracted lb 10,000 $1.50 $1,500.00
$370.00 $15,000.00
$3,700.00
Packaging
Total Fixed- +contracted
Variable lb 10,000 $0.65 $650.00
$7,865.60 $6,500.00
$78,656.00
Total Labor $3,495.00 $34,950.00
Total Variable (including labor)
Loans $7,495.60 $74,956.00
Start-up: Capital/Equipment (detailed below) $1,721.30 $17,212.97 $217350 at 5% for 20 years
Fixed
Rent
Net Income acre 10 $150.00 $150.00 $1,500.00
Insurance year 1 $1,200.00 $120.00 $1,200.00
Taxes
Net after Capital Expense Yr 1 year 1 $1,000.00 $100.00 $1,000.00
$95,868.97 no crop
Total
Yr 2 Fixed $370.00 $3,700.00
$20,868.97 half crop
Total
Yrs 3+Fixed + Variable $7,865.60 $78,656.00
$54,131.03
5 Yr Average $9,131.03
Loans
10 Yr Average $31,631.03
Start-up: Capital/Equipment (detailed below) $1,721.30 $17,212.97 $217350 at 5% for 20 years

Net
InputIncome
costs for conventional growing practices:
Pesticides: $300/acre
Net after Capital
Fertilizer: Expense Yr 1
$350/acre $95,868.97 no crop
Yr 2 $20,868.97 half crop
Yrs 3+ $54,131.03
5 Yr Average $9,131.03
10 Acre Detail
10 Yr Average $31,631.03

Start up
Capital/Equipment Unit Number Price per Total
Input costs for conventional growing practices:
Plants plant 10000 $4.00 $40,000.00
Pesticides: $300/acre
Field poles pole 1080 $20.00 $21,600.00
Fertilizer: $350/acre
Drainage Stone ton 15 $1,000.00 $15,000.00
Wire feet 85000 $0.15 $12,750.00
Hardware acre 10 $2,500.00 $25,000.00
10 Acre Detail
Irrigation drip system acre 10 $1,500.00 $15,000.00
Small Tractor tractor 1 $20,000.00 $20,000.00
Pesticides: $300/acre
Fertilizer: $350/acre

10 Acre Detail

Start up
Capital/Equipment Unit Number Price per Total
Plants plant 10000 $4.00 $40,000.00
Field poles pole 1080 $20.00 $21,600.00
Drainage Stone ton 15 $1,000.00 $15,000.00
Wire feet 85000 $0.15 $12,750.00
Hardware acre 10 $2,500.00 $25,000.00
Irrigation drip system acre 10 $1,500.00 $15,000.00
Small Tractor tractor 1 $20,000.00 $20,000.00
Sprayer sprayer 1 $10,000.00 $10,000.00
Harvester machine 1 $40,000.00 $40,000.00
Oast machine 1 $11,000.00 $11,000.00
Baler machine 1 $4,500.00 $4,500.00
Refrigeration unit cooler 1 $2,500.00 $2,500.00
Total startup cost $217,350.00

Labor Hours per week per acre Number of weeks Total Hours
Training 40 1 400
Stringing 12 1 120
Weed control 10 8 800
Spraying 3 15 450
Harvest 10 4 400
Post-harvest processing 4 4 160

Business loan payment (10-acre)

Loan Amount $ 217,350.00
Interest rate 5%
Life of loan (years) 20
Payments per year 12
Total number of payments 240
Payment per period (month) -$ 1,434.41
Sum of payments per year -$ 17,212.97
Sum of payments (total cost of loan) -$ 344,259.31
Total interest cost -$ 126,909.31

Business loan payment (2-acre)

Loan Amount $ 69,870.00
Interest rate 5%
Life of loan (years) 20
Payments per year 12
Total number of payments 240
Payment per period (month) -$ 461.11
Sum of payments per year -$ 5,533.33
Sum of payments (total cost of loan) -$ 110,666.66
Total interest cost -$ 40,796.66
Sample Budget for 2 Acre Hop Enterprise
Julian Post, UVM Extension

Income
Unit Number Price per Total Yield per acre
Dry pelleted hops dry lb 2,000 $15.00 $30,000.00 1000
Total Income $30,000.00

Expenses
Sample Budget for 2 Acre Hop Enterprise
Variable cost per acre
Julian Post, UVM Extension
Coir bale 2 $500.00 $500.00 $1,000.00 2500 strings per bale
W-clips acre 4 $50.00 $100.00 $200.00 1000ct box
Income
Fertilizer ton 1.25 $621.00 $388.13 $776.25 1,250lbs/acre Cheep Cheep (4-3-3) for 200# N/planted acre (50# N/actual acre)
Unit Number Price per Total Yield per acre
Fungicide OG 20# bag 1 $160.00 $80.00 $160.00 6lbs/acre
Dry pelleted hops dry lb 2,000 $15.00 $30,000.00 1000
Herbicide OG 5 gallon barrel 2 $260.00 $260.00 $520.00 2 applications @ 2.5 gallons/acre
Total Income $30,000.00
Training - Labor hours 80 $15.00 $600.00 $1,200.00 40hrs/acre
Stringing - Labor hours 24 $15.00 $180.00 $360.00 12hrs/acre
Expenses
Weed control - Labor hours 160 $15.00 $1,200.00 $2,400.00 hand weeding, trimming, and herbicide
Variable cost per acre
Spraying - Labor hours 90 $15.00 $675.00 $1,350.00 4hrs/week x 15 weeks
Coir bale 2 $500.00 $500.00 $1,000.00 2500 strings per bale
Tractor fuel for field work acre 2 $420.00 $420.00 $840.00
W-clips acre 4 $50.00 $100.00 $200.00 1000ct box
Oast Fuel season 1 $176.00 $88.00 $176.00
Fertilizer ton 1.25 $621.00 $388.13 $776.25 1,250lbs/acre Cheep Cheep (4-3-3) for 200# N/planted acre (50# N/actual acre)
Harvester Fuel season 1 $200.00 $100.00 $200.00
Fungicide OG 20# bag 1 $160.00 $80.00 $160.00 6lbs/acre
Harvest - Labor hours 80 $15.00 $600.00 $1,200.00
Herbicide OG 5 gallon barrel 2 $260.00 $260.00 $520.00 2 applications @ 2.5 gallons/acre
Post-harvest processing - Labor hours 32 $15.00 $240.00 $480.00 200 cutting, 200 picking, 100 drying, 60 baling
Training - Labor hours 80 $15.00 $600.00 $1,200.00 40hrs/acre
Pelletizing - contracted lb 2,000 $1.50 $1,500.00 $3,000.00
Stringing - Labor hours 24 $15.00 $180.00 $360.00 12hrs/acre
Packaging - contracted lb 2,000 $0.65 $650.00 $1,300.00
Weed control - Labor hours 160 $15.00 $1,200.00 $2,400.00 hand weeding, trimming, and herbicide
Total Labor $3,495.00 $6,990.00
Spraying - Labor hours 90 $15.00 $675.00 $1,350.00 4hrs/week x 15 weeks
Total Variable (including labor) $7,581.13 $15,162.25
Tractor fuel for field work acre 2 $420.00 $420.00 $840.00
Oast Fuel season 1 $176.00 $88.00 $176.00
Fixed
Harvester Fuel season 1 $200.00 $100.00 $200.00
Rent acre 2 $150.00 $150.00 $300.00
Harvest - Labor hours 80 $15.00 $600.00 $1,200.00
Insurance year 1 $1,200.00 $600.00 $1,200.00
Post-harvest processing - Labor hours 32 $15.00 $240.00 $480.00 200 cutting, 200 picking, 100 drying, 60 baling
Taxes year 1 $200.00 $100.00 $200.00
Pelletizing - contracted lb 2,000 $1.50 $1,500.00 $3,000.00
Total Fixed $850.00 $1,700.00
Packaging - contracted lb 2,000 $0.65 $650.00 $1,300.00
Total Fixed + Variable $8,431.13 $16,862.25
Total Labor $3,495.00 $6,990.00
Total Variable (including labor) $7,581.13 $15,162.25
Loans
Start-up: Capital/Equipment (detailed below) $2,766.67 $5,533.33 $69870 at 5% for 20 years
Fixed
Rent acre 2 $150.00 $150.00 $300.00
Net Income
Insurance year 1 $1,200.00 $600.00 $1,200.00
Taxes year 1 $200.00 $100.00 $200.00
Net after Capital Expense Yr 1 $22,395.58 no crop
Total Fixed $850.00 $1,700.00
Yr 2 $7,395.58 half crop
Total Fixed + Variable $8,431.13 $16,862.25
Yrs 3+ $7,604.42
5 Yr Average $1,395.58
Loans
10 Yr Average $3,104.42
Start-up: Capital/Equipment (detailed below) $2,766.67 $5,533.33 $69870 at 5% for 20 years

Net Income
Input costs for conventional growing practices:
Pesticides: $300/acre
Net after Capital Expense Yr 1 $22,395.58 no crop
Fertilizer: $350/acre
Yr 2 $7,395.58 half crop
Yrs 3+ $7,604.42
5 Yr Average $1,395.58
2 Acre
10 Detail
Yr Average $3,104.42

Start up
Capital/Equipment Unit
Input costs for conventional growing practices: Number Price per Total
Plants
Pesticides: $300/acre plant 2000 $4.00 $8,000.00
Fertilizer:
Field poles$350/acre pole 216 $20.00 $4,320.00
Drainage Stone ton 3 $1,000.00 $3,000.00
Wire feet 17000 $0.15 $2,550.00
Hardware acre 2 $2,500.00 $5,000.00
2 Acre Detail
Irrigation drip system acre 2 $1,500.00 $3,000.00
Pesticides: $300/acre
Fertilizer: $350/acre

2 Acre Detail

Start up
Capital/Equipment Unit Number Price per Total
Plants plant 2000 $4.00 $8,000.00
Field poles pole 216 $20.00 $4,320.00
Drainage Stone ton 3 $1,000.00 $3,000.00
Wire feet 17000 $0.15 $2,550.00
Hardware acre 2 $2,500.00 $5,000.00
Irrigation drip system acre 2 $1,500.00 $3,000.00
Small Tractor tractor 1 $10,000.00 $10,000.00
Sprayer sprayer 1 $3,000.00 $3,000.00
Harvester machine 1 $25,000.00 $25,000.00
Oast machine 1 $3,000.00 $3,000.00
Baler machine 1 $2,000.00 $2,000.00
Refrigeration unit cooler 1 $1,000.00 $1,000.00
Total startup
Business cost
loan payment (10-acre) $69,870.00
Loan Amount $ 217,350.00
Labor
Interest rate Hours per week
5% per acre Number of weeks Total Hours
Training
Life of loan (years) 20 40 1 80
Stringing
Payments per year 12 12 1 24
Weed
Total number
controlof payments 240 10 8 160
Payment per period (month)
Spraying -$ 1,434.41 3 15 90
Sum of payments per year
Harvest -$ 17,212.97 10 4 80
Sum of payments
Post-harvest (total cost of loan)
processing -$ 344,259.31 4 4 32
Total interest cost -$ 126,909.31

Business loan payment (2-acre)

Loan Amount $ 69,870.00
Interest rate 5%
Life of loan (years) 20
Payments per year 12
Total number of payments 240
Payment per period (month) -$ 461.11
Sum of payments per year -$ 5,533.33
Sum of payments (total cost of loan) -$ 110,666.66
Total interest cost -$ 40,796.66
UVM Extension helps individuals and communities put research-based knowledge to work. Issued in furtherance of Cooperative Extension work, Acts of May 8 and
June 30, 1914, in cooperation with the United States Department of Agriculture. University of Vermont Extension, Burlington, Vermont. University of Vermont Exten-
sion and U.S. Department of Agriculture, cooperating, offer education and employment to everyone without regard to race, color, national origin, gender, religion, age,
disability, political beliefs, sexual orientation, and marital or familial status.