"Six packs of my beer have been $6.79 since I started bottling them," said Sam Hoffmann, owner of Red Lodge Ales. "Now they might jump to $7.99."
The worry is that passing those costs along to consumers might hurt growth, and it's a valid worry as mass-market brewers such as Coors and Anheuser-Busch have seen relatively flat sales for several years, while microbrew sales have risen steadily.
I know the article talks more about how you can expect the microbrews to be going up in price but it also has to be affecting the big boys too. Maybe not as much, but it's going to affect them.
"A ton of malted barley is over $1,000 now," said Jürgen Knöller, brewmaster at Bayern Brewery in Missoula. "Six months ago, a ton of barley was $460."
So malt barley is up over double for the makers of barely juice. Why is malt barely up so big? Same factors driving all the grain crops up. Drought and demand. Part of that demand is ethanol whether you believe it or not. Between demand for corn driving acres out of other products and the simple fact that grains move together in price to some degree is driving price up. In some applications, like livestock feed, one product like barely can replace some corn in a ration or vice-versa. I'm sure there are more examples but I'm just trying to point out that grains all tend to surge together to some degree. Some, like Durham, have really skyrocketed this year while others like wheat, corn, barley and others more than doubled in price and then fell off a little bit.
It really sounds though like the bigger problem than malt barely for producers is the hops.
"There are no hops out there," Big Sky purchasing manager Kevin Keeter said after finishing Big Sky's hop buying for the end of the year. "It has been really challenging."
A 10-year surplus of hops, which caused hop acreage to drop, and a devastating fire in Yakima, Wash., last year that destroyed 4 percent of the nation's hop supply, have given brewers the cold sweats as they look to make backdoor deals to find what they need.
"I've got enough (Cascade hops) to do about 4,500 barrels, almost an 18-month supply," O'Leary said. "But I may have to trade them for some bittering hops at some point."
Eight months ago O'Leary was happily buying bittering hops for about $ 4 a pound.
Today he'd be paying about $22 a pound - if any were available.
I don't know that much about hops or where and how they are grown. Not know much, I know nothing. Something like this though which has driven up prices 5 fold should maybe get more people looking into growing it. Might lead to another surplus again but that's the way it works in agriculture. Big enough shortage on a commodity will drive people to grow it again but there will be some pain in the market until production levels climb.
Now I am not much of a beer drinker but if I am going to have any it will be a microbrew of some kind. Much better flavor and taste than the large companies can put out. Hell the large companies put out something that tastes like old soap water to me. A price increase on beer won't affect my budget much with my low consumption but some people this will really put a crimp on their wallets. The average American drinks between 23 - 27 gallons of barley juice a year. That's a lot of beer and a crimp on beer drinkers wallets. The price of food is rising, why not drink too.
When in danger or in doubt run in circles scream and shout. Lazurus Long