1. Decreased
US Hop Production. Between 1997 and 2007, the US
farmers' yield of hops decreased 30 percent. Why?
Ironically, for many years hops had been over-planted,
resulting in a market glut and thus low prices. In fact,
prices were so low that hop farming became unprofitable, and
thus farmers began planting other profitable crops, such as
corn to be used for ethanol production. Accounting for the
increased demand for hops over this time period, we find the
effective US hop supply reduced by 50 percent.
2. Poor
European Yield. Coincidental to the reduced US supply,
inclement weather across Europe resulted in poor hop yields
for two consecutive years.
3. Weak
US dollar. Given the hop shortage worldwide and given
the weak US dollar weak versus foreign currencies, other
countries have been able to purchase US hops for a bargain.
Thus, domestically grown hops which could have supplied
domestic brewing have been shipped abroad. Can we blame US
hop farmers for this? No. Human beings tend to be self
serving. During the previous decade when hops were
plentiful, hop farmers couldn't make a living. Now hops are
scare and commanding premium prices. Can we blame them for
selling to the highest bidder?
4. Increased
Worldwide Demand. Though not historical brewing giants,
countries such as Russia and China have dramatically
increased their internal production of beer and have thus
begun purchasing hops on the international market, further
straining a limited hop supply.
5. Mega
Breweries Have Locked in Supply. Giant breweries such
as Anheuser Busch, Miller, Coors, Heineken, Guinness, etc.,
have established long term contracts with hop farmers to
guarantee their supply. Whatever hops are left over after
the big players have taken their cut trickles down to the
craft industry, which included microbreweries, brew pubs and
home brewers. In effect, we are the bottom feeders.
Unfortunately, many hop varieties are no longer available.
Said again, there is no supply. They cannot be
purchased, regardless of price.
6. Hop
Farming Is a Long Cycle. After planting, hops
require three years to become fully productive.
Consequently, the world will continue to experience a hop
shortage for at least another few years.
