Monday, April 7, 2008

Hops and Barley Shortage

You may be wondering why your favorite 6-pack just went up in price a buck or two, and some beers are reaching $1.50 to $2.00 and up per bottle. This mostly has to do with the hops and barley shortage that literally every brewery has had to deal with over the past year, and will continue to have to do so for the foreseeable future.

A lot has been written about the topic and most brewmasters have addressed it on their own websites, but basically what is happening is that supply of ingredients is dwindling while demand for craft brews has dramatically increased. Farmers, through no real fault of their own, have failed to honor contracts to provide hops and barley to suppliers, in most cases opting instead for corn or canola (rapeseed), from which larger profits can be gained due to the emergence of ethanol, which is being touted as a "green" additive to gasoline.

Less room in fields and less interest from farmers leads to less barley and hops for brewers, at a time when new breweries seemingly spout up weekly, and brewers seek to fuel the public's desire for bigger, stronger, extreme beers. As an example, this recipe for a 5-gallon homebrew clone of Pliny the Elder, which is probably my favorite beer ever as I write this, uses over a pound of hops and nearly 16 pounds of barley per batch, which will produce about two cases of beer. Don't get me wrong, I loooove this beer, but when you consider a normal batch of wheat beer, golden ale, Irish red or the like uses more like 2 ounces of hops and maybe 10 pounds of barley per 5-gallon batch, imagine how tough it is for breweries like Russian River to produce these beers on a national scale.

Other factors have led to the shortage: a warehouse fire wiping out about 2% of American-grown hops last year. A below-average growing season due to poor weather. Brewers will probably lean towards more modest recipes in the coming months. Homebrew supply stores like mine in Roanoke have notified customers that hops will only be sold by recipe, with a maximum of about four ounces to be sold only when customers purchase their malts and yeast at the same time. Ingredients for the IPA I am currently brewing ran me close to $70 for a 5-gallon batch, while in the past I had rarely topped $50. The Irish Red I brewed in February, which contains significantly less ingredients, was under $40.

It will be an interesting year ahead (and probably more), as we watch brewers practice conservation and discretion in their own ways. Sam Adams recently sold off 20,000 pounds of hops to smaller microbreweries that were not able to obtain them due to lack of supply. From all accounts within the industry, however, the beers we enjoy will continue to line the shelves, as long as we continue to buy them. We may just need to shell out some more dough to make that happen.


Bailie said...

Do the larger breweries have their own private supply of hops? Like farms they own to grow their own? Or do they rely on independent farmers like everybody else? Surely they could afford to front their own 'hop farm' and then subsidize the smaller breweries on the side.

Am I making sense?

Kevin said...

From what I understand, breweries just have contracts with either farmers or suppliers to obtain their hops and barley. Larger breweries contract the farmers directly, while smaller breweries and homebrewing supply stores go through large scale supplier.

I also think many brewers would close up shop before they were forced to buy anything from the macrobrewers. Furthermore, those larger breweries tend to rely on lower quality ingredients most micros won't bother to use: corn and 6-row barley, for example. As for hops, microbreweries tend to use more obscure or specialty hop varieties, but there is plenty of overlap. This overlap, on varieties common to both macros and micros, has led in some cases to the complete decimation of such varieties to microbreweries and the public. Check out this article for more insight on that topic:

This paragraph was particularly telling:

“Apparently Budweiser uses Willamette, and they jumped in early and bought every last bit of it,” said Coronado head brewer Shawn DeWitt. “There’s none left. Nothing. Budweiser even offered to buy the entire stock of hops from Hopunion, and thank goodness [owner] Ralph Olsen told Budweiser, ‘No. We won’t screw the craft brewers like that.’ ”


Kevin said...

If you can't read that link try copying and pasting these parts: