Brew News

Hop Shortage?

A months-long global hop shortage continues to plague beer-brewers in the United States and around the world. Rising international demand, bad weather, a warehouse fire and fewer hop farmers are to blame for a shortage that may drive beer prices up and smaller brewers out of business, industry insiders said.

“This is not business as usual,” said Ralph Olsen, owner of Hopunion, a hop-dealer in Yakima, Washington. “Hops are selling for as much as $25 a pound.”  As recently as six months ago hops were selling for $2 a pound, Olsen said in a phone interview.

Olsen blames the shortage partially on the willingness for European hop-buyers to pay top dollar for hops.  "Prices are all over the board," he said.

 

Rising beer production in countries like China has also increased the demand for hops, and US-based craft brewers have been using more hops in their recipes, Olsen added.

A years-long hop surplus slowly drove US hop farmers out of business, which also contributed to the shortage hop-buyers are experiencing now. When he started selling hops in 1978, there were over 200 growers, Olsen said. Now, he said, there are between 50 and 60 growers in the US.

“There are only 118,000 acres of hops worldwide,” Olsen said. “There are not enough to sustain the world market.”

 

 

 

Todd Bellomy, of the Sam Adams Brewery in Boston, Mass., said that fire and weather have also affected hop yields in recent years. In 2006, a hop warehouse in Yakima Washington caught fire and as much as 2 percent of the world hop supply was lost, he said.

Other hop growers have struggled with flooding and drought, which further strained depleted hop stores, Bellomy said.

Hops are a small, vine-grown plant used in brewing beer. The crop is grown world-wide and in varying climates. Hops are grown largely on the West Coast in the United States. The crop is harvested in late summer and processed for use in brewing.

Sam Adams, owned by the Boston Beer Company, initiated a hop sharing program last year, allowing smaller breweries to buy hops at a set price. Boston Beer Company imports its hops from Germany and England at fixed prices.

Bellomy said it would be tough telling whether the market will stabilize this year. “We won’t know until October or November,” after the crop is harvested and processed, he said.

Olsen predicts that the market will stabilize in one or two years. “There are more acres going in,” he said.  Brewers will not see an immediate increase though, as it takes a few years for hop crops to mature, he said.

“Prices will go down [eventually], but not to where they used to be,” Olsen said.

Craft brewers will also have to adjust to the type of hops farmers are planting, he added.

“International buyers want high-alpha hops, and craft brewers use aroma hops,” Olsen said. 

High-alpha hops allow brewers to use less hops in their recipes, while craft brewers tend to use larger amounts of aroma hops in their recipes. But, “there’s no real difference between aroma and alpha,” and brewers will adjust to survive, he said.

-Kathryn Eident

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content and design by:
Kathryn Eident
Boston University
2008