2 Beer Guys Blog

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Monday, October 22, 2007

Hops price hike brewing up a crisis

By Tracey Rauh Solomon , Staff writer

HAVERHILL - Sean Corcoran and Adam St. Jean don't mind paying $4 for a pint of beer at The Tap in Haverhill.

But if the price were to go up to $4.50 or $5, would they still be willing to sit at the bar and sip their favorite specialty beverage?

"I won't drink less beer," said Corcoran, 37, of Haverhill, quaffing a beverage at the bar one afternoon last week. "I'll just be spending more money."

St. Jean, 38, agreed.

"We come here for the beer," he said.

That's music to the ears of brewer David Wilson, who took time to explain the economics of beer-making to some customers last week.

Recently, the price of malted barley - the grain used to make beer - has increased by 50 percent to 100 percent, depending on the type. The other primary ingredient in beer, hops, has gone up even more, he explained, from $3.25 to $11 a pound.

The price of malt has gone up as grain prices worldwide have exploded due to a combination of factors ranging from a severe drought in Australia reducing the wheat crop, to increased planting of corn instead by U.S. farmers who are taking advantage of high prices for biofuels such as ethanol.

While malted barley is the primary ingredient in beer, hops provide much of the taste.

Wilson said there is a worldwide shortage of the crop, which grows on vines and is related to the cannabis family. The shortage, he said, has been caused primarily because there aren't enough farms growing it and because there are only a few sources of hops.

"We knew there were issues," he said during a recent tour of the Tap's basement brewing and bottling facility. "But nobody knew the extent until a few months ago. Everybody was making arrangements for next year and realized there was a crisis."

He said brewers that haven't gotten their orders in for next year may be out of luck, while those running short this year are scrambling to find the critical ingredient wherever they can.

According to a story in last week's Seattle Post-Intelligencer, the Pacific Northwest grows virtually all the hops produced in the United States About 70 percent of that crop comes from the Yakima Valley, said Ralph Olson, owner of Hopunion LLC, a Yakima-based seller of specialty hops. Worldwide hops acreage of 230,000 acres in 1994 shrank by 51 percent, to 113,000 acres in 2006, because the crop sold for less than the cost of production, Olson told the Seattle paper.

In 1978, he had 250 local growers. Now he has about 50. 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 all of a sudden everyone woke up and said, 'Oh, we need hops!' and all those (farmers) are gone," he said.


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