Some of my interviewees mentioned a hop shortage to me in our discussions, so I decided to take a closer look. Even though I read the newspaper and listen to NPR daily, I had not heard of any hop shortage. Turns out, I might just live under a rock. Hop Shortage? Yes indeed.
So I called Ralph Olsen of Hop Union in Yakima, Washington to get a feel for what is going on. Ralph is the owner of a hop-buying company that sells largely to American craft brewers, though Ralph said they do deal hops internationally.
I had heard that we were experiencing a hop shortage because of a fire in the state of Washington. Ralph confirmed that a fire had indeed occurred, and in a warehouse next to his. He claimed, however, that the fire only destroyed about 3% of the US supply of hops, and that the fire occurred over two years ago.
I had also heard that drought had damaged some of the crops, and Ralph agreed that weather certainly is a factor, as it is in any farming market. But, he claimed, fire and drought, though a nuisance, were not the real reason the US is experiencing a shortage of hops.
In fact, what I learned about hops turned into a lesson on the global marketplace. The US is not the only country experiencing a hop shortage; many other countries around the world need hops and some are willing to pay exorbitant prices, Ralph said. US craft brewers are feeling the crunch because buyers in Europe need hops so badly they are willing to pay more, thus driving prices up.
Ralph explained that for years the global hops market had a surplus of hops–so much so that smaller hops farmers in the US were slowly driven out of business. A specialized market became even smaller–for instance, Ralph said, when he started in the business in 1978, there were over 200 growers in the US. Now there are only 50-60 growers, he said. But the surplus of hops kept prices low–as low as $2 a pound.
But with the growing popularity of craft-brewing in the US, and the explosion of brewing in countries like China, hops have suddenly become an item much in demand. Today, hops are selling as high as $25 a pound, and are quite difficult to find, Ralph said.
Will the hop market continue at this rate? Ralph said he expected the shortage to continue for a few more years before the market evens out. He explained that for the market to stabilize, a few things have to happen.
For one thing, craft brewers will learn to use hops other than what they are used to–and Ralph even used the old “soup” analogy I heard from Roger on my trip to the Modern Homebrew Emporium in Cambridge. Ralph said that hops are like spices for brewers, and that they “just get used to what they are using,” much the way we find spices we like and stick to them in our kitchens. In order to stay in the game, they will have to adapt their recipes, or find themselves out of business.
The shortage will also encourage growers to plant more acres of hops, Ralph said, but brewers won’t see a higher hop yield for a few years.
Until then–brewers will have to get (more) creative, and beer drinkers may see craft-brew prices go up.
So–relax while you can with a homebrew!!
Next time I’ll talk about what I learned about the Sam Adams hop sharing program when I visited the brewery in Jamaica Plain, Mass.