Hops In Short Supply: Beer Prices Rise

In the last few years we’ve had crop reductions in the United States for one of our most precious crops: the hop. The second shortage falls on the barley, which lends a sweetness to balance out the flavor and bitter from the hops. Both ingredients are in short supply which means prices on the core recipes are rising for everyone from home brewers to mass market beers from companies like Anheuser-Bush.

This means you’ll probably see a slight rise in prices for Budweiser and Michelob brands from the big beer brewer along with their competition. They’re passing the costs on to the consumer as prices continue to rise. Barley prices have gone up 70 percent and Hops have shot through the roof, costing 300% more than normal.

“Such dramatic spikes are due, in part, to the increased costs of other commodities in the nationwide brewing industry, including ethanol, aluminum and glass, experts say. Others blame recent crop failures, bad weather and government pressure on farmers to invest more heavily in other crops” (Queens Chronicle)

For us microbrew drinkers a price raise may not be so surprising as we pay a bit more than most people anyway, especially for an imported brand like Löwenbräu in Munich or anything from England. Paying USD $10.00 or USD $11.00 for a six pack isn’t too bad but when you’re challenged to bring consumers the lowest costing beer with an expected quality of taste like Anheuser-Bush it becomes difficult.

Apparently 10 years ago we had a large surplus of hops and farmers cut back on production to equalize the surplus. Now, we’ve experienced a 30 percent drop in production from 1995 to 2006. How long will this new shortage last? “While big brewers can hedge against future cost increases by locking a fixed price into their contract, smaller specialty brewers often have to take whatever they can get from a supplier.” You may see a bigger bar bill around this holiday season, so be prepared.

First gas prices, now this!?