Crop report 2014

The harvest started by some farmers about August 20th, some of them started a little bit later. About first weekend of September most of farmers finished their harvest of Saaz variety and continued with further varieties. Definitely finished harvest last weekend - September 13th - 14th, 2014.

1. Saaz variety

Harvested area could be around 3.900 ha. Estimated yield out of this area can vary 1,2 - 1,3 tons/ha. Total production should be in range 4.700 - 5.100 tons.

Comparison with last eight years: 2006 - 4.718 tons 2007 - 4.563 tons 2008 - 5.563 tons 2009 - 5.395 tons 2010 - 6.569 tons 2011 - 5.020 tons 2012 - 3.494 tons 2013 - 4.366 tons

As far as alpha acids content concerns it seems to be very average, we guess according present information it could move in range 3,2 - 3,4 % (EBC method, harvesting alpha). It is influenced also by weaker results particularly in Trschitz area where most of the analysis are below 3,0 %. Visible quality of hop cones is good and green, just in very occasional cases downy mildew was remarked.

2. Other Czech varieties

a) Agnus

Agnus was harvested on 40 ha with estimated yield around 1,9 - 2,0 tons/ha. Estimated production up to 80 tons. Alpha acids content seems to be average, around 10,5 - 11,0 % (EBC method, harvesting alpha). The yield results will be weaker average, total quantity compare with last three years. 2011 - 85 tons 2012 - 63 tons 2013 - 80 tons

b) Premiant

Premiant was harvested on 187 ha with estimated yield around 1,8 - 2,0 tons/ha, what is long term average. Estimated production around 350 tons. Alpha acids content long term average, around 8,5 % (EBC method, harvesting alpha).

Comparison with last eight years: 2006 - 245 tons 2007 - 424 tons 2008 - 479 tons 2009 - 484 tons 2010 - 502 tons 2011 - 467 tons 2012 - 345 tons 2013 - 357 tons

Another approx. 25 tons of Premiant from Slovakia will be avalaible on the market.

c) Sladek

Sladek was harvested on 272 ha with estimated yield about long term average, around 2,3 - 2,4 tons/ha. Estimated production around 600 tons. Alpha acids content weaker average, around 6,5 % (EBC method, harvesting alpha).

Comparison with last eight years: 2006 - 364 tons 2007 - 488 tons 2008 - 549 tons 2009 - 568 tons 2010 - 538 tons 2011 - 488 tons 2012 - 402 tons 2013 - 468 tons

d) Other varieties

From the other varieties are becoming most important varieties Kazbek and Saaz Late. Kazbek was grown on 18 ha, but almost all was first year - baby hops, we estimate production around 10 - 12 tons. Saaz Late was grown on 15 ha, where about one third was baby hops. We estimate yield 1,3 - 1,4 tons/ha from this combination (production around 20 tons), what is maybe a little bit disappointing. All other varieties (Bor, Harmonie, Bohemie, Rubin, Vital, Saaz Special, HHT, HPE and trial varieties) was grown on area 36 ha and could give another approx. 60 tons of hops.

3. Total Czech production, crop 2014:

Total Czech production we guess based on above mentioned datas between 5.800 - 6.200 tons of all varieties.

Comparison with last eight years: 2006 - 5.453 tons 2007 - 5.631 tons 2008 - 6.753 tons 2009 - 6.616 tons 2010 - 7.772 tons 2011 - 6.088 tons 2012 - 4.338 tons 2013 - 5.330 tons

4. Market situation:

Crop 2014 seems to be like year with very positive climatic conditions (mild summer temperatures, enough good timed natural rainfalls, no big hails storms in the spring - summer), that is why total production should be remarkably higher than in previous two years. On the other hand reducing of the acreages in the past as well as high level of contracts between growers and dealers as well as between dealers and brewers shows that even such good crop will be most probably enough for so so fulfilling forward contracts and will not be any place for spot market (of course, with exception of very minor sales in astronomical prices). We can not speak about spot market as is understood in Germany or USA.

Subsequently dealers facing recent reality will be afraid even conclude further forward contracts for coming period 2015, 2016 and maybe even 2017 crop. Most probably everybody will try to increase their purchase side level or production and widen a little bit "safe belt" in situation, that in coming two - three crops will be not such convenient weather conditions and such good crop as this year.

For brewers it means:

• who is coming now, is coming a little bit late
• if some minor sales could be realized, price is not a question, the question is real availability
• anyway by fulfilling forward contracts this year it can calm down a little bit situation of forward buyers in their stocks
• serious talks about forward contracts availability for period 2018 - 2021 should start soon

In Saaz, September 16th, 2014