So there is a hop shortage?

NZ Hops 2016I can’t believe that this topic is being recycled yet again.

Hop shortage could result in price rise for beer

Another year another hop shortage story. I wrote about this two years ago.

How many times is this topic going to be written about. Seems like every year now a different newspaper will run this story using local breweries.

I listed stories about hop shortages going back to 2009. Yes it was me in the article in 2009 moaning about not enough hops.

You know what I did, I started taking out longer contracts. Guess what? Now my hop shortages come down to not forecasting well enough on specific varieties.

I know it is particularly hard for start up breweries to get contracts. You have to start somewhere, so start today. All breweries should be contracting the hops they need. In New Zealand, NZ Hops will contract NZ grown and imported hops.

If you contract for longer, and if everyone could pay a little more (which can be passed on in the price of the beer), then growers will grow more.

Growers want to know they can cover the cost of committing to the risk of planting out new fields. If they can get a 5 year+ commitment at a good price then they will look at growing more, as well as investing more in infrastructure (such as pickers and dryers).

NZ Hop Research 1st year hopsMy question is how do brewers offer to pay enough, over what period to get hop growers to grow more?

If they take out other crops then does the shortage of this crop, say like blueberries in Yakima, cause the price to increase in blueberries resulting in a change back from hops to blueberries.

There is much caution from the growers to invest because if you go back to right before the start of this hop shortage because of the booming craft beer industry, price were so low. For example I was landing US grown Cascade hops in the brewery in Auckland for $8/kg. that was 2006. 10 years ago 1/3 of the hop acreage in the US had been pulled out. 10 years in the life of a farmer was yesterday. There need to be assurances to invest to grow more hops.

The answer to this is brewers need to commit to hop contracts for as long as they can and at the best price they can pay to secure the supply they need.

P.S. To all reporters/journos who think they might want to write an article about “the hop storage” in the future please talk to brewers with hop contracts, hop growers or Doug from NZ Hops. Get the real story, not some chicken little the sky is falling waffle.

Maybe a little research?

The Hop Market
So how should brewers think about the coming hops market, finding a proper balance between understanding the challenges that growers and dealers will face while not giving in to extraordinary popular delusions and the madness of crowds (aka unfounded beliefs)?

How to Estimate for your Forward Hop Contracts – by Teri Fahrendorf
In conclusion, you now have the tools to accurately predict your current and future hop needs

  • Pdubyah

    Of course…. if everyone could pay a little more (which can be passed on in the price of the beer).

    You know already that the price of NZ craft beer isn’t as competitive as it might be for all the reasons. Then consider the balance between worthy premium priced beer and the profit margin, and whilst not every beer can be great there is a point where you just lose an audience, and rely on the keen enthusiast, or a well developed export strategy.

    Also a five year future plan is not something many businesses have, and I’d suggest some craft brewers in NZ are winging it.

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