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Back in October of this year the news of an impending hop shortage claimed that prices will skyrocket for their favorite craft brew and that the price of hops in general would rise to all-time highs. If you are a micro/craft brewer perhaps the situation of the world hop market should be taken very seriously. If you are a homebrewer, how will this affect you? Supply shortages are estimated between 700 and 1,300 metric tons alpha or approximately 8.6 of the annual worldwide demand due to the poor 2006 European crop. The main factors that have contributed to this situation are that Europe's 2006 crop was ruined by heavy rains; while Australia's was cut by a severe drought and Canada's was "just average. Slovenia (grower of Styrians) lost at least 1/3 and possibly as much as 1/2 of their crop to a hailstorm. England is almost out of the hop business. Their acreage of 2,400 in 2006 (down from 17,000 in 1976) represents only 2 percent of the worldwide acreage. The Czech crop was down 25. However, annual growth has increased over the last 10 years (1995-2005) to approximately 3. 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, possibly by between 50 cents and $1 per six-pack. 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. Homebrewer’s 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 homebrewer’s is that the cost of hops per five gallon batch is negligible and results in an added cost of pennies per glass of brewed beer. So while all of your micro/craft brewed drinking buddies are complaining about the cost of their favorite beer, you can smile a little as you are brewing your next batch of beer.
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