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Hop Contracting
All about forward contracting hops
Who to contact about your hop contracting
Simply fill in the hop contracting request form below and we will then be able to advise you on availability and prices.
If you need more help and advice in setting up a contract, please call the sales team.
Office +44(0)1905 830734
Andrew and Ben Hart (Non-UK customers)
Mark, Beth, Jamie, Jon or Rich (UK customers)
WHAT ARE FORWARD CONTRACTS?
Forward hop contracting is a financial agreement between two parties to buy or sell a specified asset at a predetermined price on a future date and has an expiry date.
These are commonly used in commodities and forward contracting enables buyers and sellers to lock in prices, reducing the risk of price fluctuations over time. Unlike futures contracts, forward contracts are typically private, customisable, and traded over-the-counter.
This tool is widely used for risk management and hedging, enabling parties to plan and secure costs or revenues despite market volatility.
With hop contracting – otherwise referred to as Hop Crop Contracts, Forward Hop Contracts, and other synonyms – work with hops as the commodity. You are agreeing to buy a specified quantity of a specific years hop harvest (crop) at a specific price from the hop merchant. They are agreeing to sell you those hops in return.
WHY CONTRACT?
Put simply;
- Growers have one customer for hops and that’s breweries.
- It takes a whole year and a lot of input, effort and expense to grow, pick, dry and pack a crop of hops.
- If no contracts are forthcoming – unlikely a grower will risk spending money by overplanting.
- Turning it on it’s head if growers are unable to judge future requirement, it could result in underplanting. When harvest is done, it’s done for another year. Unlike manufacturers, we can’t just make more.
- If a grower doesn’t grow the hops the brewer has nothing to brew beer with.
- A contract secures hop supply for the brewer and a sale for the grower. If mother nature determines a shortfall, you will be first in line for those harvestable cropsit’s
Do I need to contract?
- If your recipes are not dependent on certain varieties you could risk it and buy totally from the spot market.
- However some brewers have been struggling to get hold of the varieties they need and found out how painful it could be when they can’t get the varieties required.
- At the same time the other breweries (with long-term contracts) were getting everything they needed at reasonable prices.
WHAT IS THE SPOT MARKET?
When placing an order, why do charles faram ask if i have a contract or am buying on spot?
- Buying on spot is like purchasing off the shelf rather than securing a specific amount, price, or batch number.
- Growers typically produce extra hops beyond their contracts to ensure they can meet commitments even in a poor harvest year. Spot hops come from this surplus.
- Buying from the spot market carries risks—during a poor year, the hops you need may not be available. In a good year, surplus hops might be available at a lower price than a contract.
- A contract serves as an insurance policy, ensuring you get your hops first at a fair price for both you and the grower.
HOW DO PROPRIETARY BRANDS HOLD THE PRICES UP?
- Proprietary hop brand owners enforce strict contracts that legally require growers to remove hops if instructed.
- Reports indicate that some growers are already being told to pull out Citra®.
- With production tightly controlled, volumes will likely match or fall slightly below contracted amounts. As a result, spot hops won’t be available, prices will stay high, and brewers will be eager to secure contracts.
- If overproduction happens, brand owners store the excess or extract it for future use rather than selling at distressed prices—unlike in the past before proprietary brands were introduced.
MANAGING YOUR CONTRACTS
- Review your hops annually by assessing your stock, brewing schedule, and existing contracts.
- For large quantities, contract ahead with a decreasing volume and adjust annually as needed. This approach allows you to increase or decrease volumes based on beer sales.
- For smaller quantities, contract ahead for one year and review bi-annually, topping up as necessary.
- If variety flexibility isn’t a concern, you can take the risk of buying from the spot market.
- Contracts ensure supply and help sustain hop farms. Supporting growers gives them the confidence to continue production and invest in the future.
- Our dedicated Sales Managers are ready to assist you.
WHAT DO YOU NEED TO KNOW ABOUT CHARLES FARAM HOP CONTRACTS?
- Charles Faram & Co Ltd strongly recommends forward contracting your hops to secure your supply.
- All hop contracts follow a calendar brew year. For example, northern hemisphere 2025 brew year hops will primarily come from the 2024 crop, though we reserve the right to supply the previous year’s crop against a contract.
- Hop contracts will be in 5kg or 20kg increments, with a minimum total of 40kg, which can include mixed varieties.
- We do not buy back unused hops. You must purchase and pay for all the hops you contract. At our discretion, any stock released from a contract will incur a 20% charge of the value of the released amount.
- Hop growing is a long-term business. Each plant crops once a year, and if you have unused hops, we may not be able to find a new home for them before the next crop arrives. However, we pride ourselves on flexibility and will always consider your contract amendment requests to find a mutually beneficial solution. Some varieties may allow easier changes than others.
More about hop contracting
- Hop varieties mature and harvest at different times, so predicting when a specific variety will arrive at our stores is not possible. We prioritise varieties that are out of stock or low in quantity.
- Varieties protected by a registered trade name often sell out quickly.
- Our hop prices follow a sustainable pricing model to encourage growers to cultivate hops for you.
- All prices are ex-cold store Newland and may ship with other brewing ingredients.
- We rotate our hops on a first-in, first-out basis.
- Prices and availability for spot hops (leftover quantities after contracts are fulfilled) change daily, so we recommend contracting your hop needs in advance.
Northern hemisphere hop contracts
Let us have your contract request for northern hemisphere hops by the 30th of June.
The contract year is based on when the hops were harvested; see the contract dates table for examples.
All products must ship by the 30th of November in the year following the contracted harvest year. After the 30th of November of the year following harvest, Charles Faram & Co Ltd may declare the full outstanding amount due and payable, and mitigate damages by selling the contracted product.
Free storage is available until the 30th of November of the year following harvest; after that, a fee of £0.05 per kg per month applies.
The Northern Hemisphere harvest typically begins in late August and ends in early October, with shipment to our stores and pelleting and packing running from November to February.
New Zealand
hop contracts
Let us have your contract request by the 30th of November.
The contract year is based on when the hops were harvested; see the contract dates table for examples.
All products must ship by the 30th of June in the year following the contracted harvest year. After this date, Charles Faram & Co Ltd may declare the full outstanding amount due and payable, and mitigate damages by selling the contracted product.
Free storage is available until the 30th of June in the year following harvest; after that, a £0.05 per kg per month fee applies.
New Zealand hops are harvested in March each year and typically arrive at our store by early July. Pellets take longer and may arrive as late as mid-August
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