Cost of hops crops hits tops: Won't someone please think of the beer?

Discuss

32 Responses to “Cost of hops crops hits tops: Won't someone please think of the beer?”

  1. ratatoskr says:

    So it appears that for the next few years all hops are owned by people who don’t think Natural Ice is that bad. But there is another way..

    http://en.wikipedia.org/wiki/Gruit

    Pre-hops herbal beer. It even comes with it’s own conspiracy theory:

    “Some authors (notably Stephen Harrod Buhner in his book “Sacred and herbal healing beers”) have been tempted to oversimplify this and present the switch to hops as a Protestant crackdown on feisty Catholic tradition, and as a Puritan move to try and keep people from enjoying themselves with aphrodisiac and stimulating gruit ales by imposing the sedative effects of hops instead.”

  2. carltonlee says:

    There’s a suggestion of causality here – that this is an effect of the global food shortage. Not the case. Rather, the hop shortage is symptomatic of the cyclical capital crises of which the food shortage is another symptom. Hops were overplanted and become cheap; the bottom fell out of the market; farmers stopped planting them because there were more profitable crops; now there is a shortage.

  3. pork musket says:

    My father planted some hops a couple weeks ago. It doesn’t take much to work get it going, just gotta be careful about critter proofing it – dogs and rabbits will eat the shoots. As an aside, hop flowers are toxic to dogs and can be fatal even in small amounts.

  4. Marketblogger says:

    I’m currently researching this more in depth for my blog http://www.marketblog.com. My initial impression is there’s a combination of things going on including those already mentioned.

    One factor I suspect is the rise of microbreweries, as I suspect they may use more hops for the same amount of beer.

    Another, probably the biggest, is the weakness of the dollar, incentivizing exports. If we export more, there’s less available locally, and therefore brewers have to pay more, or buy from overseas, where they pay more due to the weakness of the dollar, so the price goes up relative to the change in the dollar, for everyone.

    Another factor, for which I have yet to find any evidence, may be speculation. Though hops contracts do not trade on an exchange, they do exist, and can be bought sold off market as are many derivative markets that hedge funds participate in. Hedge funds are having more and more say in the day to day operations of many businesses, in many sectors, especially agriculture, and businesses are getting more and more into derivatives markets. They like to call it risk management, but the truth is they do a lot of speculating of their own these days. So I’m inclined that at least some of the price increase is due to this kind of long only speculation.

  5. edselpdx says:

    Ummmm… the Yakima fire affected the 2006 crop (so mostly last year’s beer). I’ve seen figures from 4% to 10% of the 2006 US crop was burned/smoke damaged. This is probably more r/t limited production/poor growing last year? or OIL pricces.

    We brewed with hops that my neighbor grew with no problem. It pretty aggressive plant that needs lots of overhead support. Beatiful plant, though.

  6. Practical Archivist says:

    Here’s a photo from the Wisconsin Historical Society to illustrate what Wisco hops looked like 100 years ago. I’m confident we can grow our own hops here in Wisconsin again…but that 3 year wait is gonna be a doozy.

    P.S. ATOJ & DEADMEAT — maybe we can start with the abandoned condo development at milwaukee and e. wash.

    -Sally J.
    The Practical Archivist

  7. ploni says:

    Thanks, Tituscooker, for your level-headed analysis. If we only had more commentators like you on the various news sites, we’d be much better off.

    And, by the way, the Kabbalah tells us these sudden, global price hikes are a good sign — something unique and very, very good in the history of the world is about to happen.

  8. Drew from Zhrodague says:

    Good think I planted hops in my garden! Also, the three-times-expansion of square garden area should cut down on our fresh produce purchases.

  9. Fnarf says:

    Uh, right. The Kabbalah.

    I can’t stand the way American craft beers are hopped, so maybe this will lead to better beers. What it SHOULD lead to, for this and many, many other reasons, is a total cessation of the massive government subsides for ethanol corn. It’s turning out to be arguably the most destructive plant strategy ever.

  10. fiendishthingy says:

    I live in the Yakima Valley and this spring the number of hop fields around here have doubled. If current trends keep up all we’ll grow in the valley will be hops and grapes.

  11. Fnarf says:

    I’m growing hops in my yard. I’m gonna get a crop this year. Who’ll start the bidding?

  12. Patrick Austin says:

    @12: “Many people are growing their own. One hop plant, within 2-3 years, can provide 20 lbs of hop flowers, and since they are ‘weeds’ they grow pretty well in many climates. 2008 and 09 may be bad for hops, but after the farmers who return to hop farming, and many people grow their own, the prices should drop rapidly.”

    The yield per plant is more like 1 1/2 to 2 lbs, not 20 lbs. Still, 5 gallons of VERY hoppy beer uses maybe 6oz, so a few plants will keep you and your friends drunk for a while.

    My four new plants went in a week ago. Hopefully will be popping any day now…

  13. Christopher J Olsen says:

    Okay, this is sad and all, but really, how many US microbrew ales have you had that have waaay too much hops in them? A lot. Moosehead, Sierra Nevada, and so on. They’re way too hoppy. Occasionally, I like a beer that’s hops heavy, but some of these brands are just obscene with the hops content. Hop heads have ruined it for everyone else. They used up all the hops, and now the rest of us have to suffer. Okay, Hops are not the only ingredient in beer. It is important, yes, but it shouldn’t be the only thing you taste. When I want a beer, I want a beer, not a bottle of liquid hops. Freakin’ hippies.

  14. DrewB says:

    Beer is being hit on multiple fronts right now as are most industries. Not only are hops being affected price wise, but so is malting grade barley. This year alone the prices are up 30% due to increased transport costs, bad harvests (Europe and Canada this time and the US crop was lower quality than usual) and more. While not as dramatic as the 300% price jump for hops, it’s equally significant since you’re using 10x more barley per batch.

    Oh and then you’ve got glass prices (a prime culprit in the earlier German mention) and on and on. It’s a tough time for friend’s who are opening places. The bigger breweries (Sierra Nevada, Stone, New Belgium, Dogfish Head…) were smart in securing contracts, but even then you had suppliers either flat out of hops or refusing to sell at the negotiated rate.

    It will be interesting to see if in the face of the economy and economic pressures the US Craft Beer Industry can maintain its impressive growth of the the past few years.

    You’ll notice the increased attempts by the big 3 to move to market with “craft-like” beers. Michelob, for instance, is being used to push a Marzen, a Wheat and a line of Ultra flavored Amber beers. Miller has just launched their line of “Craft Done Light” craft style beers, a Wheat, Blonde and Amber. All of this in addition to Coors/Molson’s expansion of the “Blue Moon” lineup and A-B’s non Michelob craft beer killers, Bare Knuckle, Pacific Ridge, Beach Bum Blonde, etc.

    Why? Because the Big 3′s sales are flat, or as flat as a big company ever wants to see them. They see these moves as necessary to show the stock holders that they’re continuing to stave off the market erosion from Craft Beer, while buddying/merging with major import brands (the Ambev lineup of Stella, Hoegaarden for instance) or buying distribution rights to regional micros like RedHook, Goose Island or Old Dominion.

    One last disturbing bit out of the hop crisis. It’s true fields are being replanted and full relief will be 3 years or so out, but we’re losing many of our distinctive aroma varieties. Hops have 3 major roles in brewing, bittering, flavoring and aroma. Typically a variety is suited towards bittering or flavoring/aroma. The flavoring/aroma hops have less bittering potential (Alpha Acid %age) and oil blends that push forward Grapefruit/Orange, Piney or Spicy/Woody/Herbal aromas. The majority of hops are processed into hop bitterness extracts so the lions share of profit is found in growing hops with the highest Alpha Acid levels possible. So, the farmers coming online aren’t planting the aroma varieties to any great extent.

    For many micros the fear now is that with the exception of Cascade (think Sierra Nevada Pale Ale’s Orange/Grapefruit aroma), we’re going to lose lower AA distinctive beasts like Liberty, Willamette and Ultra (already gone, sadly).

    Oh and the UK with their distinctive East Kent Goldings and Fuggles? Almost every last acre of hop land is in the hands of one older farmer. Speculation points to his family breaking the farms up for real estate once he passes.

    Yeah, ok, I take this way, way too seriously.

  15. Josh Parris says:

    Time to stock up on beer.

  16. eevee says:

    Isn’t that the point behind Sierra Nevada pale ale? I would never start the evening with one–maybe a brown ale like Newcastle to gently introduce my tastebuds to the evening’s drink. But later on, a touch more hops is nice.

  17. legion says:

    The idea that the burning of a warehouse in freaking Yakima can impact global beer prices just spins my noggin.

  18. Jack says:

    Is there any guide for average Joe—or Jack—consumers to see what basic material costs are? The cost of everything seems to be going up and it would be nice—or at least perversely comforting—to see all the costs in one nice place.

  19. gadfly says:

    @Jack (#3)

    it’s called the price of oil…

  20. Grey Eyed Man of Destiny says:

    @Legion-

    Yakima hops are a prized, much sought-after strain. Think “wine shortages were exacerbated by a warehouse fire in Napa Valley”

  21. isaac says:

    this has also hit us home-brewers quite hard… but it is still the most cost-effective method of stocking up on good beer.

  22. teresa says:

    I believe that Sam Adam’s is offering to help home brewers/microbreweries with some of their extra hops at a discount, which is pretty awesome for a big company.

    http://www.samueladams.com/promotions/HopSharing/Default.aspx

  23. Ahoj says:

    As a community that loves it’s microbrews Madison Wisconsin heard about this about 5 months ago

    link

    to sum up how screwed beer lovers are, it takes 3 years to grow the extra hops.

  24. Antinous says:

    Miller Lite is people! It’s people!

  25. Deadmeat says:

    @AHOJ

    Hello fellow beer lover and Madisonian.

    I’m helping myself through these dark days by raiding my beer cellar for 5-year old Capital Autumnal Fire and whatnot.

  26. Grey Eyed Man of Destiny says:

    @Chris J Olson

    Moosehead is neither a US brew nor is it all that hoppy…

  27. Jeff says:

    Natural alternatives, um…

    Hops and Cannabis are in the same family of resin-producing aromatic plants. I’ve had beer made with bud, and it was very much like Heineken–retched skunk brew, but it gave a very nice buzz.

  28. Marshall says:

    I know of at least one microbrewery that might go out of business because they can’t get their orders for hops filled. So, let’s see first Costco stars rationing rice, and now they’re basically rationing hops – what’s next on our way down?

  29. Pipenta says:

    I’ve a solution to the problem. Those big breweries that are making crap beer anyway can substitute other, um, natural substances for the hops.

    For Bud and Bud Lite, bull terrier piddle should do the trick. For Heineken, a pole cat tincture is just the ticket.

    In neither case, will any animals be harmed. For the first, all that is required is a convenient drain installed alongside a fireplug. And the Heineken folks just need to open a spa for skunks and change out the hot tub water on a daily basis.

    The folks who drink that stuff will never notice the difference and the hops can go to the small brewers who make truly tasty beer.

  30. Pipenta says:

    And really, at those prices, isn’t this just a nice opportunity for local growers?

  31. Halloween Jack says:

    Hmmm… my favorite local microbrewer was complaining about this some months ago, and attributed it to bad weather in Europe. Also, “The dry cones of a particular flowering vine, hops are what give your favorite brew its flavor and aroma”–of course, the type and amount of malt have a lot to do with flavor and aroma, of course. As someone who prefers darker, more modestly hopped beers, I am not worrying as much.

  32. TitusCooker says:

    The warehouse fire is not to blame. The issue is multiheaded. Bad hop harvest on two continents (US and Europe), coupled with loss of hop farmland (250k acres reduced to 125k acres), coupled with poor profit from a glut on the market in both US and Europe caused a lot of farmers to move to corn for ethanol. The warehouse fire was just the nail in the coffin as some ridiculous amount of hops burned or were smoke damaged.

    The big brewers have little problem getting hops, for the most part because they have contracts. Boston Beer Company is even selling off “excess” to other brewer’s who are in jeopardy of going out of business due to the rising costs of materials. They should have an entire article devoted to their generosity in the midst of such shortages.

    Homebrewers and small craft brewers are the most disadvantaged due to the lack of contracts with hop suppliers (or their relatively lesser amounts), but several hop suppliers are making sure that purchasers are not hoarding and that there are enough varieties available for everyone.

    Many people are growing their own. One hop plant, within 2-3 years, can provide 20 lbs of hop flowers, and since they are ‘weeds’ they grow pretty well in many climates. 2008 and 09 may be bad for hops, but after the farmers who return to hop farming, and many people grow their own, the prices should drop rapidly.

    Also note that beer prices should not rapidly increase, although many producers have done so in anticipation. It’s gouging, for the most part. Many brewers are eating the cost, but in Germany, the beer prices per glass have gone up 20-50% and it’s caused a lot of anger. Most of the cost of beer is warehousing and taxation, not ingredients, so the cost increase should not get passed on too much. If a craft brewer is making 7 barrels of beer, and the cost went up a factor of 10 ($2/lb to $20-30/lb), the number of individual beers (2,300 twelve ouncers, 4-5 lbs of hops in a mild beer) comes out to just about 2 cents more per beer. Of course that’s a simplification, and doesn’t take into account other increases, such as barley cost, increased gasoline costs, etc., but don’t be fooled into believing that your beer should suddenly cost $5 more per six pack.

Leave a Reply