Hops/barley woes troubling brewers

A growing demand for hops and barley, a demand some growers and brewers fear might not be able to be met, is threatening both the production and price stability of beers and ales.

The Big 3 of American brewing -- Anheuser-Busch, Miller and Coors -- are in decent shape because of long-term contracts. They're getting the supply, but paying higher prices which in the next few months probably will be passed along to consumers.

The smaller operations and craft breweries aren't quite so fortunate.

A series of causes has affected market prices, among them bad domestic weather, a warehouse fire in Washington state late last fall that wiped out a huge stash of hops, a series of devastating storms in parts of Europe where many hops are grown, and the fact that many American farmers switched from hops or barley to more profitable crops after the brew ingredients market flooded in the late 1990s.

"It's going to affect the price of beer (here) by at least 10%, and that's a safe and probably conservative estimate," Greg Emig, owner of the Lafayette (Ind.) Brewing Co., told his local newspaper, the Journal & Courier.

The price of some hops, a flower used to stabilize and flavor the beer, has quadrupled and the price of malted barley, a key ingredient used during brewing, already has increased by 20% and could rise more, Emig said.

In Michigan, the Detroit News is reporting that a hops shortage has reached "crisis stage" for Michigan's 70 microbreweries. Prices are on the rise, and some crewers may shut down.

Microbreweries in Michigan are a $25 million industry that produces about 90,000 barrels of customized beer a year.

In Pennsylvania, things appear to be even worse. The Morning Call newspaper in Allentown quotes the president of a craft brewery in nearby Easton as saying, ''We use about 12 different varieties of hops, and they went up 350 to 400%, each one.''

Dan Weyerbacher, president of Weyerbacher Brewing Co., said that translates to an increase from about $4 a pound to about $23 a pound. The price of another essential, malt, also has gone up, from about 40 to about 80 cents a pound.

''Maybe your favorite craft beer will go up 30 to 60 cents a bottle, but for a quality-of-life item, that's not too bad,'' Weyerbacher said.

Of course, it's an ill wind that doesn't blow some good someone's way. As the CanWest News Service reports this week:

"Beer is becoming an international beverage of choice and Canadian barley is expected to continue to play a major role in fuelling the brew, an expert said. With consumption increasing worldwide and global production rising by 6 to 8% annually, demand will likely increase for malt barley grown in Western Canada, said malt and feed barley expert Al Morris of IMBM Winnipeg.

" 'Worldwide, it's just booming,' Morris said during a presentation at a CGF Brokerage and Consulting agriculture conference in Saskatoon. 'We need more barley in the ground to keep up with global beer sales.'

" China is Canada's largest international barley customer, and the Asian beer boom is already putting demand on the commodity, said Bruce Burnett, director of weather and market analysis at the Canadian Wheat Board (CWB), which markets both barley and malt. While the call for Canadian barley is good, he said, there are some challenges when it comes to the high cost of transportation.

" 'Ocean freight rates right now are at record levels for the transportation of the grain, so that's causing some, I hate to say difficulties, but it is one of the factors right now that is determining what the Chinese demand for malting barley is,' Burnett said."

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