Even though US hops for 2007 was an average crop a warehouse fire in the US destroyed 110 metric tons alpha. Also, acreage reductions as a result of low prices in the last years and a tendency of most global brewers to rely heavily on the spot market and not on forward contracts have caused grower's not to be able to invest in their hop fields and equipment. For 10 years, Northwest farmers grew too many hops. Prices plummeted. Farmers grew less. Local farmers were lured to plant more lucrative crops, such as cherries, apples and grapes, or to sell their land to be built on. Now, with increased beer output, the brewer's are in need of hops and a lot of the hop farmers are gone.
The long-term average growth in beer output has ranged between 1- 2%. However, annual growth has increased over the last 10 years (1995-2005) to approximately 3% coinciding with the fall of communism and the establishment of capitalistic free market economies in Eastern Europe and China. During the same 10-year period the world acreage for hops has decreased by 35%. The brewing industry could help by sending the right signal to the growing community by committing to long-term contracts of at least 4 years duration in order to entice growers to stay in business and to make the necessary investments into modernizing their operations. Of course, forward contracts are not a guarantee against crop failures they greatly enhance the farmer's security of supply and represent an effective tool for forward planning.
Right now the craft-breweries are paying tens of thousands of dollars right now for something that will not be used until the following year. When there is a price increase in raw ingredients it will be passed on to the consumer. The impact will be higher beer prices or your favorite hop-heavy brew might have a slightly different taste.
What's the bottom line for homebrewers? Well, certain varieties are getting more expensive and a few varieties will run out. Brewers have to be willing to try other varieties. Homebrewers should prepare for the potential need to substitute different hops, to replace varieties that currently give your favorite brew their "signature" flavor. In fact there may be slight flavor variations over the next several years, as the hop industry works to correct this situation.
Already some of larger online homebrew retailers have raised their price and a number of "temporarily out of stock" statements can be found in the "Hops" section. The good news for homebrewers is that at the current price of hops the cost per five gallon batch is still reasonable and results in an added cost of only 10 - 20 cents per glass of brewed beer. So while all of your micro/craft brewed drinking buddies are complaining about the rising cost of their favorite beer, you can smile a little as you are brewing your next batch of beer, as long as you are able to find the hops you were looking for that is.
Gregory McLaw is a regular contributor to
www.makebeerathome.info and enjoys brewing and drinking his own beer. For homebrew related supplies try
www.brewbuddies.com or
www.perfectbrewing.com.
