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Global shortage of hop plants good for farmers, beer industry will likely take hit

 
Shawn Raecke/ Idaho Statesman
This Lagunitas "Kill Ugly Radio" beer being served at the Front Door in Boise last week is an India Pale Ale style and an example of an American craft beer that emphasizes hop flavors, aroma and bitterness. American craft brewers are facing a major hop shortage this year. Prices are going up and hops are hard to find, which likely will cause beer prices to rise.

ADDITIONAL INFORMATION

 

BEER BEFORE IT HITS YOUR GLASS

Ever wonder how four simple ingredients - barley malt, hops, water and yeast - are transformed into delicious beer? Here is a quick lesson:

Brewers convert barley to barley malt by germinating kernels in damp rooms; they then are dried before germination is finished and roasted to draw out different flavors and colors.

The barley malt is cracked, put in large tanks and mixed with hot water. This thick mixture is called the mash. Once the mash is done, the spent grain is separated from the sweet and sticky liquid known as the wort.

The wort is transferred to the brew kettle and boiled. Hops are added for a bitter balance to the sweet malt mixture. Different varieties of hops bring bitterness, flavors and aroma.

The hops are separated from what is now a liquid bitter wort, which is sent through a chilling pipe to the primary fermenting tank. There, yeast is added to convert the sugars into alcohol and carbon dioxide. Primary fermentation begins as the yeast works its magic, and carbon dioxide is vented out. This can take 5 to 10 days.

Aging can take a few weeks for most ales or more than a month for certain lagers. When secondary fermentation is complete, the beer is moved to bright tanks from where it goes to taps, bottles or kegs - the last stop before it goes in a pint glass.

Ales are British-style beers that ferment at warmer temperatures and generally are more robust and bitter.

Lagers are German-style beers most Americans are familiar with. They are lighter, tend to be more carbonated and have a subtle, clean finish.

BY THE NUMBERS

10%

amount of the nation's hops grown in Idaho

3RD

Idaho's rank among top hops-growing states

5.3 MILLION

pounds of hops harvested in Idaho in 2005

$8.8MILLION

value of hops raised in Idaho in 2005

3,287

acres of Idaho land devoted to hops

113,000acres of hops in the world

BY PATRICK ORR - porr@idahostatesman.com

Edition Date: 01/15/08


Hop plants provide the small pinecone-like flowers that provide the bitterness and aroma that balance the sweet malt of your favorite craft beer. But a worldwide shortage could give beer lovers and beer brewers a hangover.

Once-plentiful hops are scarce with a depletion of hop stockpiles, bad weather in Europe, a strong euro and growing overseas beer market and a trend since the mid-1990s of U.S. farmers walking away from hop farming for more lucrative crops.

The shortage means craft beer prices are expected to rise in the coming months. That's good news for the Idaho farmers who produce hops and should get a financial bump next year. But it also means beer producers - including homebrewers - will have fewer hops to work with, limiting their ability to create new beers or get the hops they need for their favorite recipes.

Even if you don't tend to visit brewpubs, here's why hops may matter to you: Idaho farmers produce 10 percent of the nation's hops - about 5.3 million pounds on 3,287 acres in 2005. With $8.8 million worth of hops (in 2005, the latest the state has reported), Idaho is the nation's third-leading hop state.

Washington state is the leading U.S. hop producer, growing almost 80 percent - more than $90 million worth in 2006. U.S. farmers produced a third of the world's hops until the late 1990s, when a world surplus depressed prices and farmers planted other crops.

"It is a world growing market and world brewing market - and there is not enough hops being grown in the world to supply brewers," said Ralph Olson, owner of Hopunion LLC, a Yakima, Wash., business that buys hops from farmers and sells them to craft brewers all over the U.S. "Right now, there are only 113,000 acres dedicated to growing hops worldwide. That's it."

Today, he added, European brewers are buying a lot of hops - and it is cheaper for them because of the strength of the Euro over the dollar.

"This may put some small brewers out of business - there just aren't enough hops to go around," said Greg Obendorf, whose family has grown hops in the Wilder area since 1948. "There is just a huge shortage. And farmers just can't ramp up production that fast."

Obendorf, who is locked into a three-year contract to sell his 860 acres of hops for a set price, will add another 140 acres of hop trellises at his Wilder farm next year.

The good news for Obendorf is that he will sell the hops grown on those 140 acres for a higher price.

But it will take two or possibly three years for farmers like Obendorf to generate a full yield from the newly planted hop vines, said Paul Gatza, director of the Boulder, Colo.-based Brewers Association.

That means continued high costs and short supply for craft brewers. The only real use for hops is in beer.

"We are already seeing a price increase, and I think we are looking at two very tight years," Gatza said. "And it really affects the small (brewers) because they use more hops per barrel."

Hop farming requires tall trellises on which the vines grow and expensive equipment to remove the delicate cones without damaging them, said Mike Gooding, whose family has grown hops near Parma and Wilder for five generations. Hops also require large drying facilities with special kilns after harvest.

Gooding is adding 40 more acres to his 500 this summer and may ad more. He said farmers must be careful because adding acres of hops is expensive and time-consuming. Building the trellises, which can be 10 feet or taller, requires costly steel and cable. Workers also have to tie the vines in the summer.

Major brewers like Anheuser-Busch or SAB Miller likely won't be dramatically affected because they have long-term contracts with hop growers or own their own hop fields, like Anheuser-Busch's Elk Mountain Hop Farm in Bonners Ferry.

And hops are not highly featured in the standard, mass-produced light lagers that dominate most of the U.S. beer market.

But the shortage already is affecting craft brewers all over the U.S., who tend to brew more flavorful and hoppy ales and lagers based on classic European styles that require more expensive malt and hop combinations.

For instance, hops that used to sell for $3 to $6 per pound last year are selling for $15 to $20 per pound now, Olson said.

Higher craft beer prices are starting to show up in Idaho, said Matt Gelsthorpe, the Boise Co-op's beer buyer. He expects prices for many craft beers to rise between 10 and 15 percent in coming months.

"We have already seen price increases from Rogue, Pike, and Spaten," Gelsthorpe said. The brands prominently feature hops in their flavor profiles.

"It is a market thing. ... There was such a glut of hops for a long time, and now they are all gone," he said. "Brewers will eventually get it figured out, but I am just hoping we don't lose any craft brewers along the way."

Brewers at two of Boise's local brewpubs were able to secure contracts to provide hops this year. Next year, however, they expect to pay more.

Sockeye brewmaster Josh King said he signed a contract last July to guarantee his hop supply this year because he kept hearing about an impending shortage. He is glad he did.

"You hear stories about people playing $30 a pound for hops that cost $4 last year," King said.

"I've heard stories about brewers going to the hop fields trying to buy 200-pound bails on the spot," TableRock Brewpub brewmaster Bob McSherry said. "The other thing is that there are some varieties you just can't get anymore. I don't think there is going to be too much experimentation this year."

Certain varieties of hops are sold out for the year, such as the Cascade hops grown in Washington's Yakima Valley that impart the distinctive floral and citrus-like aroma to the classic Pacific Northwest pale ale style.

That is partially because there is more worldwide demand for "alpha" hops, the hop flowers that provide bitterness to balance the sweet malt in beer and fetch a higher price in the world market.

Aromatic hops like the Cascade and Willamette varieties are less desirable on the world market, so fewer farmers plant them, Olson said.

The result is that hop farmers are dedicating most of their acreage to hops like Chinook and Columbus, high in alpha bittering acids.

At Brew Connoisseurs, a Boise supply store for people who brew their own beer at home, owners Casey and Rhonda Jones are dealing with the shortage by rationing out their hops. Customers come in with a recipe, and the Joneses sell what they need to fill the recipe. Hops are sold in 1-ounce bags based on size of a recipe.

Customers are aware of the shortage and have been pretty good about asking for just what they need, she said.

"We have enough to get by but only if we ration," Rhonda Jones said. "We can't get Cascade or Willamette hops at all right now."

Patrick Orr: 373-6619

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