Hops shortage brewing for American beer drinkers

Americans celebrating the festive season with their favourite craft beer may want to sip a little more slowly. If they have been paying attention, they will have noticed that the price of a pint has been rising. Soon it may go a lot higher because of a nationwide shortage of hops and malted beer.

Supply shortfalls are forcing brewers to pass higher costs on to consumers. And with supplies of some varieties of hop drying up, some craft and micro-breweries are resorting to subtly altering recipes. Some are even contemplating suspending operations altogether.

Part of the problem lies with the hops, traditionally grown in the north-west US. Acreages have been plummeting as farmers look for higher returns elsewhere. By some estimates, hops production in the US has dropped by some 50 per cent in the past decade. Weather damage to crops in Europe has exacerbated the shortage and the weakness of the dollar has made importing hops from abroad all but prohibitive.

Beer lovers may also soon be cursing America's nascent love affair with a much less tasty commodity, ethanol. As the US government presses hard for huge increases in production of ethanol for use as an alternative car fuel, farmers are taking heed. Feed-stocks that can be converted into the fuel, notably corn, are being rushed on to land that was once dedicated to other crops, hops included.

One result is a 25-30 per cent spike in the cost of feed for livestock. Soy bean harvests are down too and American cattle farmers are increasingly turning to barley to help feed their animals. But brewers also need malted barley for their recipes.

"This is like a runaway freight train," said Scott Faber, a lobbyist for the Grocery Manufacturers Association, which is warning of rising prices across the gamut of food supplies. "It's great news for corn farmers but terrible for consumers."

For the small speciality brewers, the situation is especially perilous. "It could force some smaller breweries to really have to jack their prices up," noted Pat Moe, owner of Finger Lakes Beverage Centre in upstate New York.

Giant companies such as Anheuser-Busch and Coors have been able to protect themselves by entering long-term contracts for supplies, something cottage brewers do not have the financial leverage to negotiate.

In just three months, hops prices have risen in the US by as much as 600 per cent. Brewers are discovering that about 95 per cent of hop varieties they want are simply not available.