Hops Shortage Likely to Boost Price of Beer

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Hops prices have increased by 20 percent for the most widely grown hops, to 80 percent for specialty varieties. Getty Images hide caption

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Hops prices have increased by 20 percent for the most widely grown hops, to 80 percent for specialty varieties.

Getty Images

A worldwide hops shortage will make stouts, ales and other specialty microbrews more pricy in coming months.

A triple whammy of bad weather in Europe, an increase in the price of barley and a decrease in hops production in the U.S. has lead to a price increase of 20 percent for the most widely grown varieties, to 80 percent for specialty hops. The shortage is particularly hitting microbreweries, since they use more hops than major brewers.

Industrial brewers like Anheuser-Busch and Miller are more insulated against the shortage because they have futures contracts with hops farmers. The contracts, which help big brewers hedge against rising prices, allow them to buy a quantity of hops for a specific period of time for a certain price.

Paul Gatza, director of the Brewers Association, which represents craft brewers, says that small brewers from Austria to Oregon are on edge.

"I was with some brewers in the local tavern last night, and it was a definitely a hot topic of conversation. People are a little worried," Gatza said.

At Rock Bottom Brewery in Portland, Ore., Brew Master Van Havig says that large brewers with futures contracts get first dibs on this year's scarce harvest, leaving microbreweries to their own devices.

"Friends of mine didn't have contracts. And at this time of the year they're scrambling, they're just desperate to try and buy anything," Havig said.

The shortage has helped U.S. hop farmers who in the past, have had a hard time profiting from their crop. Gayle Goshie and her family have been farming hops in Oregon's Willamette Valley for more than a century. She blames overproduction for hops' previously cheap place on the agricultural market. The glut pushed many hop farmers out business, which gradually helped hop prices recover. Though Goshie doesn't call this year's price spike a windfall, she's says it's helped those who stayed in the business.

"It's nice to every once in awhile have a cushion. And we'll have a cushion for a few years," Goshie said.

The exact impact of the hop shortage is not yet known, since the shortage is just starting to take effect. At Rock Bottom Brewery, Havig speculates that a six-pack of microbrew, which already costs close to $8, may increase by as much as $3. Havig equates that $8 mark to gasoline reaching $3 a gallon.

"If you're used to coming home after work and popping open a can or a bottle of beer you're probably still going to do it," he says. "But — back to the gasoline thing — some people are going to sell the truck and buy the Honda."

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