With the boom in home and commercial brewing, hop shortages have become a real problem. And, Midwestern states are trying to ramp up production to meet demand, gaining ground on the successful hop industry out in other parts of the US. Michigan, in particular, is eager to establish itself as the Midwest’s premier source of quality hops. Given the state is right around fifth in the nation for its brewery count, the efforts make some sense.
Not only are hop farmers themselves banding together to grow the industry, the Michigan legislature is encouraging in-state and out-of-state producers to make beer as “Michigan” as possible. Introduced this session is a “Farm to Glass” bill that would offer tax breaks on beer, cider, mead, and wine that’s made with Michigan ingredients and sold in Michigan. The bill sets a threshold for just how much Michigan must be in every brew. To start, beer must have at least 20% of its hops produced in Michigan along with at least 40% of its other ingredients. Wine, mead, and cider also must meet the 40%-Michigan-ingredients threshold to qualify. Interestingly, that percentage requirement would be in effect over the next five or so years and then, in 2020, the percentage requirements would increase. Producers would get a break of 8 cents per gallon up to 500,000 gallons and then 4 cents per gallon for next next 14,500,000 gallons.
A thriving, diversified, and reasonably priced hop market is good for producers (and imbibers), so if the Midwest can introduce some new strains or put a dent on the existing shortage, we see it as good news—even if the mechanics of the tax break make it easier on Michigan producers to ultimately meet the requirements.