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Schumer: Federal Loans & Loan Guarantees Would Provide Important Growth Spurt for Budding Hudson Valley Hops Industry

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Today, at Eastern View Nursery & Dutchess Hops in Lagrangeville, U.S. Senator Charles joined local Dutchess County hops farmers to help provide federal backing for New York's first major commercial "hop yard' in Dutchess County. Specifically, Schumer urged the U.S. Department of Agriculture and the U.S. Small Business Administration to provide critical financing for the equipment needed to establish a cooperative of Hudson Valley hops farmers and craft breweries, that will produce locally grown, organic hops to better meet the growing demand from New York's thriving craft breweries.

Schumer emphasized that New York is one of few states without a local source of hops for their brewing industry, but access to capital is a major obstacle given that the startup costs for an aspiring hops farmer can run as much as $100,000 for equipment alone, and can cost as much as $13,000 per acre to prepare the land for a successful planting. Schumer is highly supportive of the effort to develop a cooperative that will share these costs amongst many hops farmers in Dutchess County and the rest of the Hudson Valley, and asked USDA and SBA to provide low-cost financing and start-up capital in the form of loans to small businesses. Schumer was also joined by private investor Sean Eldridge, who is interested in partnering with the federal government for a private-public partnership to invest in and promote hop farming throughout the Hudson Valley.

"The hops industry in Hudson Valley, centered around Dutchess County, is poised to take root and thrive, and I'm urging the Department of Agriculture and U.S. Small Business Administration to support this resurgence with the necessary capital financing," said Schumer. "Federal loans and loan guarantees will help grow Hudson Valley hops during a formative time and establish the region as a leading hops producer for craft brewers in New York and other neighboring states. The Hudson Valley's favorable soil and climate and close proximity to New York City make it a prime location for developing New York's only major commercial "hops yard', and I will fight for critical financing to ensure that it's ready to serve local craft breweries and give a real boost to tourism in the area."

"Our goal at Hudson Valley Hops is to not only bring hop farming back to its rightful home in New York State but to make the Hudson Valley the "Napa Valley of beer'," said Pat Manning, Director of Hudson Valley Hops. "We are well under way with our farmers and brewers, but Sen. Schumer's willingness to help jumpstart the process is most welcome. We thank Sen. Schumer for his support and dogged determination to assist with any funding out there."

New York State has a long history in hops production. Hops farms bloomed between 1830 and 1849 to the point where New York became the national leader in production. By 1855, the region was raising over three million pounds annually and was responsible for 85 percent of all hops in America. This strength gradually declined due in large part to blight, changing climate conditions, competition from drier states in the Pacific Northwest, and Prohibition. As a result, the bulk of hops production shifted to small farms and home breweries, where it remains today.

Schumer was joined at Dutchess Hops by Justin Riccobono and Carmine Istvan of Eastern View Farms; Patrick Manning, Executive Director of Hudson Valley Hops; Mike Oates and Sean Eldridge of Hudson River Ventures; as well as farmers and craft brewers from throughout the Hudson Valley, including representatives from Catskill Brewing Company, Newburgh Brewing Company, Hudson Valley Brewing Company, Yonkers Brewing Company and Chatham Brewing Company. Schumer today vowed to fight for critical federal financing that will provide low interest loans or loan guarantees to this cooperative of local farmers in time to plant a hops crop that would be ready to harvest later this summer. Specifically, Schumer said he will personally lobby for the group in pursuit of the financing opportunities from the following federal programs:

· The SBA's traditional 7(a) loan guarantee program, that provides a federal guarantee for loans made by SBA-approved lenders;

· The SBA's CDC/504 loan program, that provides financing for small businesses to purchase equipment;

· The SBA's venture capital program that leverages private capital raised by SBA-licensed Small Business Investment Companies with federally-backed loans;

· The USDA's Farm Service Agency's "Farm Ownership" loans, a direct loan program that provides farmers the opportunity to purchase farmland, construct and repair buildings and make farm improvements;

· The FSA's loan guarantee program, which will guarantee up to 95 percent of loans made by participating banks, credit unions and other lenders, to make credit available to farmers who would be unable to obtain sufficient credit without the guarantee.

Dutchess Hops is a farm in Lagrangeville, New York that is preparing to plant a hops crop for the first time this season. Currently in seed stage, the farm is looking for financing to acquire the equipment necessary for harvest and preparation of it hops by autumn. Once up and running, Dutchess Hops aims to be the first commercial Hop Farm in the Hudson Valley, eventually the largest Hop Farm in New York State, and at the core of the Hudson Valley Hops cooperative. The farm is planting four acres this year with plans to expand to fifteen acres by 2015. Schumer noted that a potential public-private could allow the industry to grow even more rapidly, and was pleased to bring representatives from Hudson River Ventures at Dutchess Hops to help establish a path towards such an effort. Hudson River Ventures already has a strong record of investing in craft breweries in the Hudson Valley. By linking craft breweries with Hudson Valley grown hops, Hudson River Ventures believes they can help grow the farmer and craft brew sectors of the Hudson Valley.

Hudson Valley Hops is a not-for-profit cooperative whose mission is to help create, establish, support, and market the Hudson River Valley Region as the premier hops growing area in the United States. The cooperative is also a major advocate for protecting the Hudson Valley's fertile farmland while showcasing farmers and the breweries that support them.

A copy of Sen. Schumer's letter appears below:

Dear Secretary Vilsack and Administrator Mills,

I am writing to bring to your attention an exciting opportunity in the Hudson Valley region of New York -- an opportunity that, like so many others, is in need of capital to come to full fruition. That opportunity is the development of New York State as a leading hops producer for craft brewers in New York and other states in the region, and I respectfully ask you both to work with me to explore all available alternatives to allow fledgling hops farmers in the Hudson Valley to finance the capital investments necessary to establish a viable hops industry in New York State.

New York was once the leading supplier of hops to US beer producers. New York once had 800 acres of hops, then became nonexistent due to Prohibition and has only recently started to recover, reaching approximately 50 acres this past year. Moreover, the Hudson Valley region is well-positioned to lead the resurgence of New York's hops industry: it's in close proximity to New York City, and many of the craft breweries springing up in the City and the Hudson Valley would benefit from local hops suppliers. The soil and climate also create a supportive environment for growing hops, and the development of a vibrant hops-growing industry in the area will give a real boost to tourism.

Recognizing this opportunity, a group of farmers and brewers have joined together to form Hudson Valley Hops, a not-for-profit cooperative whose mission is to bring brewers and farmers together to bring a high quality Hop to the region. The cooperative will also be instrumental in creating a Beer trail throughout the region, bolstering agritourism. As new hop farms come online, Hudson Valley Hops will assist them through education and consultation, while at the same help defray the costs of a large equipment expenses through collaboration. But in order to reap the benefits of this budding opportunity, local farmers need to make substantial capital investments to prepare the land and purchase necessary equipment like mills and oats houses. These upfront costs can run as high as $100,000 for new equipment for a mid-sized farm, and as much as $13,000 per acre to prepare the land and complete a planting.

Accordingly, I urge you both to explore every option to help Hudson Valley Hops and/or its members access the capital necessary to get this budding industry up and running in the Hudson Valley. For example, Dutchess Hops, a farm in Dutchess County, New York, is preparing to plant a hops crop this season, which would be ready to harvest in the late Summer or early Fall. But they need financing to acquire the necessary equipment to complete the harvest and prepare the hops. So time is of the essence, and I respectfully ask that you work with Dutchess Hops to find a timely solution that will allow them to complete their harvest this year and establish a foundation upon which to grow their future business.

Thank you for your consideration. I look forward to working with you to ensure that this small agricultural business opportunity in New York has every chance to succeed.


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