Hops Shortage Likely to Boost Price of Beer 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% for the most widely grown hops, to 80% for specialty varieties. The shortage is particularly hitting microbreweries since they use more hops than major brewers.

Hops Shortage Likely to Boost Price of Beer

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We go now to another story in Oregon. It's a business story sure to get your attention. The world is suffering from a shortage of beer. Well, not all beer, but bad weather in Europe means there is a shortage of hops, the flavoring agent in beer. And that is likely to hike up the cost of a six-pack of microbrewery beer.

David Welch reports.

DAVID WELCH: Paul Gatza is the director of the Brewers Association, a trade group that represents craft brewers. He says that small brewers from Austria to Oregon are on edge about this year's shortage of hops.

Mr. PAUL GATZA (Director, Brewers Association): I was with some brewers in the local tavern last night and it was definitely a hot topic of conversation. People are a little worried.

WELCH: Worried because hops are not only scarce, they're expensive - anywhere from 20 percent to the most widely grown varieties, to an 80 percent price increase for specialty hops. That, mixed with an increase in the price of barley, may mean that the price of beer is on the rise. But not just any beer - no, specifically, microbrews.

Mr. VAN HAVIG (President, Rock Bottom Brewery, Portland, Oregon): These are simco and crystal hops.

WELCH: Van Havig is the brewmaster at Rock Bottom Brewery in Portland, Oregon. He says the likes of Anheuser-Busch or Miller aren't affected by a hop shortage; one, because these big brewers use considerably less hops, creating a more neutral tasting beer. And two, big brewers have futures contracts with farmers. That means the brewers agree to buy a quantity of hops for a specific period of time and the farmers agreed to sell those hops at a certain price. Most important, though, says brewmaster Van Havig, those large brewers with futures contracts get first dibs on this year's scarce harvest.

Mr. VAHEK: Friends of mine didn't have contracts and at this time of the year they're scrambling. They're just desperate to try to buy anything.

WELCH: The shortage has helped one group, though: hops farmers. In the past, these farmers have had a hard time turning a profit on hops.

Ms. GAIL GOSCHE (Hops Farmer): This is just a little small field. It's only two acres...

WELCH: Gail Gosche and her family have been farming hops in Oregon's Willamette Valley for over 100 years. Gosche blames overproduction for hops' previously cheap place on the agricultural market. With so many farmers growing so many of them, it was hard to turn a profit. But that same glut pushed many farmers out of the hop business. It's a fact that's helped hop prices recover. And although Gosche doesn't call this year's price spike a windfall, she says it's helped those that decided to stick with growing hops.

Ms. GOSCHE: It's nice to be able to every once in a while have a cushion, and we'll have a cushion for a few years.

(Soundbite of brewery)

WELCH: Back at the brewery, Havig is flushing tanks after a full day of brewing. He says that he's certain the cost of microbrews will increase. The only question is how much. At this point, no one really knows because the hop shortage is just starting to take effect. Havig says it may be a dollar a six-pack, or it may be as much as three. A six-pack of microbrew already costs close to $8. Havig equates that $8 mark to gasoline reaching $3 a gallon.

Mr. HAVIG: If you're sued to coming home after work and popping open a bottle or a can of beer, you're probably still going to do it. But you know, again, back to the gasoline thing: it's - some people are going to sell the truck and buy the Honda.

WELCH: And in this case, the truck is a microbrew and the Honda might be a can of Miller or Budweiser.

For NPR News, I'm David Welch in Portland, Oregon.

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