Hops business keeps family farm alive

The farm has been in the family since the 1930s and the rising cost of land meant finding higher returns per acre

Dwayne Stewart returned home to Abbottsford, B.C., with a plan. He was going to try and save the family farm.

However, his idea to grow hops probably raised more than a few eyebrows.

Hops weren’t exactly a common sight in the region, or anywhere in the province for that matter.

“Not only was there not anything thing around, there was no processing, there was also no knowledge,” he said.

“The biggest thing we lost in 20 years of not having much or any crops growing is the knowledge associated with commercial hops production (that) exists in other countries.

“It doesn’t exist natively in Canada anymore. We don’t have bankers that get it. We don’t have accountants that get it. We don’t have lawyers that get it. We don’t even have insurance companies that get it. We don’t have crop insurance, we don’t have agrologists that are attuned to hops as a specific crop. We don’t have the secondary hops processing facilities.”

However, where many people might have given up, Stewart embarked on a quest to return his part of the country to what it once was.

During the Second World War, British Columbia’s Fraser Valley was the largest hops producer in the British Commonwealth.

Stewart, along with his wife, Diane, his cousin, Brian Zaborozan, and his brother-in-law, Bob Williams, pushed forward and formed the B.C. Hops Co. It now has one of the most modern hops processing facilities in the country, where they dry and bale hops before shipping them to Oregon to be made into 
pellets.

“Our overriding mandate, really, is to help preserve family farms by providing a new source of revenue,” Stewart said.

He likens the business model to a co-operative in the sense that everybody uses the infrastructure of the B.C. Hop Company to advance the interests of their farms.

“Most of the farms we have brought on board are other families that have the same problem as us,” he said.

“How do we retain this property, this farm, in the family, despite having children who are professionals of another ilk, who may or may not be interested in farming, but want to maintain this historical link to the land?”

The B.C. Hops Co. takes care of the crop, it starts it, manages it, processes it and then shares the revenue on it.

ADVERTISMENT

“But the risk is still significantly (the property owners’),” he said.

“They own the property, they own the infrastructure, they’re carrying the costs.”

The company is looking for more land on which to grow hops, but for now it manages 130 acres of hops on 10 farms, nine of them family farms.

Stewart said he understands that is not a lot of acres by prairie standards, but hops is an expensive and time-consuming crop to manage. He said he doubts reports that say it can take 500 man hours a year to manage an acre of hops, but he confirmed it is labour intensive.

“It certainly is not 10 man hours a year.”

He said farmers looking to get into growing hops should look at the international market as their main competitors rather than their neighbours.

Even though growers might be selling to a local brewery that emphasizes locally sourced material, hops growers also have to satisfy large brewers that buy in huge volumes, and that means meeting international quality standards.

“You have to come to the table with the same level of quality, consistency, quality selection, variety type and chemical analysis that they’re used to seeing from the major international providers,” Stewart said.

“You’re playing in a very developed, sophisticated market that doesn’t need you because they’re already growing, already expanding, they’re already meeting the demands of the growing craft beer movement.”

It’s a craft beer movement that shows no signs of slowing down.

As of mid-November, there were 125 craft breweries in B.C.

Ken Beattie of the B.C. Craft Brewers Guild said last month during the B.C. Argifood and Seafood Conference in Kelowna that the boom is sparked by a desire for locally grown, locally made products and more relaxed government restrictions.

He said craft breweries’ market share in B.C. increased to 25 percent this year from 19 percent in 2014.

ADVERTISMENT

“People ask, ‘is the bubble bursting?’ There is no bubble bursting here,” said Beattie.

Stewart said he has no doubts that his decision to leave the real estate development business after 22 years surprised a lot of people, but the family thought it important enough to make it work.

“It’s something that we felt strongly about, being a lot of family history in the farm,” he said.

“We wanted to try to keep it for the next generation.”

The farm was started by Stewart’s grandfather in the 1930s and has been in the family for four generations.

Stewart decided in 2000 that he had to find another way to make money on the farm or it might not survive.

He said the challenge of farming in the Fraser Valley is that land is overly expensive and planting fields of hay, corn or soybeans or renting will generate $500 to $700 per acre, which isn’t enough.

“On land that costs $60,000 to $80,000 per acre, a $600 return is (one percent),” he said.

“Your cost of carrying it is too significant.”

He said he was looking for a crop that had potential to return thousands of dollars per acre.

On the other hand, Stewart said, although hops are a higher value crop, they also require a high infrastructure investment. The cost of putting in an acre can cost $20,000 or more, and there are also maintenance costs. As well, hops do not provide a full revenue until their third year of production.

Stewart said 2016 marked the third year for most of B.C. Hops’ fields — the first full harvest — which he considered a big success.

The farm has also set itself up as a focal point where consumers can learn about hops and the craft of making beer. It held the first ever B.C. Hop Fest in October and also stages a Beer Competition in July.

ADVERTISMENT