Mosaic hops are harvested at Sodbuster Farms in Oregon.

U.S. hop stocks as of Sept. 1 were up just over 2% from a year ago, USDA’s National Agricultural Statistics Service reported.

Northwest acreage was up in 2020, but high wind and wildfire smoke in early September damaged fields and reduced yields. Brewers’ demand was also lower as COVID-19 impacts continued.

“So we actually did fairly well considering all of the variables we faced last year between storm damage to Pacific Northwest companies and COVID-related damage to beer sales,” said Ann George, executive director of Hop Growers of America and the Washington Hop Commission.

Washington leads U.S. hop production by a wide margin. Idaho and Oregon rank second and third, respectively.

George said stocks reported in the NASS survey are being held in U.S. locations Sept. 1 regardless of ownership or country of origin.

Northwest hops are generally grown on contract.

The survey provides a year-to-year trend line on total stocks on hand at U.S. locations on March 1 and Sept. 1, she said.

The Sept. 1 report shows stocks after a harvest has had a year to clear the supply chain. The March 1 report provides a trend on hops remaining in storage after initial delivery on contracts after harvest.

NASS said the Sept. 1 inventory of hops held by growers, dealers and brewers totaled 133 million pounds, up 2.3%. Stocks held at dealer and grower locations increased by 6.38% to 100 million pounds. Stocks held by brewers fell 8.33% to 33 million pounds.

George said Northwest hop production volume in 2020 was down by 7.35%. Harvested acres were up 3.7% but yields fell 12.5%.

The increased popularity of craft beers, which use more hops, bodes well for growers. But for craft brewers who frequently make new and different beers, “it’s harder for them to contract for everything they need years in advance,” she said. Dealers need sufficient inventory to supply orders, though brewers may contract what they know they will need for flagship offerings.

“Stocks held by dealers has increased because they are providing more custom storage and are holding more for customers that are not contracting,” George said.

Brewers Association Chief Economist Bart Watson said the industry has seen a shift toward more dealer storage as “smaller brewers, who are bigger users of the U.S. hop crop, simply have less storage capacity.”

The association reported total U.S. beer volume sales dropped 3% in 2020, but craft beer volume sales dropped 9%, reducing the volume-based share of the U.S. market held by small and independent brewers to 12.3%.

Craft retail dollar sales dropped 22%, representing just under 24% of the U.S. beer market.

Watson said craft industry volume has rebounded in 2021, though it likely will finish the year just below 2019 production levels.

The rise in hop stocks may partially relate to COVID headwinds, and “even if craft had grown 3% a year in 2020 and 2021, it would have likely used millions of pounds more in hops than it did.”