Recently, there has been some information out there about this years harvest of hops (particularly) and the impact this will have on the craft/microbrew industry. Just so you can get some insight; here are some excepts from some local craft brewers.

From Weyerbacher:

In late September I was told by another brewery that malt was going up about 40% and hops 30 to 40%. I started calling suppliers and they confirmed this was true, and also that they have no prices locked in yet. Additionally, I was informed that many farmers are not honoring their contracts to the fullest extent (don’t blame the farmers please) due to the crazy price situation that’s evolving in crop farming, with corn being twice the price it was last year.

He goes on about what that means to the buyer at the store

A price increase at the brewery of 10 to 15%, just to cover costs, no gouging whatsoever, will result in a price increase at retail of 20 to 25%.

And Now a few words from Victory:

Autumn has brought with it the harvest, as usual. But for brewers, this year the harvest has delivered concern and discomfort rather than the warm glow of abundance.

You see, the raw ingredients of beer, barley and hops, have come up short of global demand. The factors underlying this situation are a few rather than merely one.

Hops are in the most dire of circumstances with certain hop varieties non-existent in the marketplace at this point and those that have been secured by brewers have been at premiums of 30 to 300% over last year’s prices. With shell-shocked craft brewers now prowling online industry forums in search of hops much like those without tickets outside a sold out Grateful Dead concert in need of ‘a miracle,’ the situation needs some clarity and we’ll attempt here to supply it for you.

Brian went as far as to contact Dogfish Head to find out what they were doing about the situation. Were they looking a a price jump, recipe changes, etc.

From Bri’s email exchange (Brian - tell me if I should remove this )

Bri asked:

I’m just curious, with the way things look with the hop shortage and the
extreme amount of hops in your beers (especially the “Minutes” line) do you
for see a change in hops being used or less availability of some of your
beers?

And Andrew responded:

Don’t worry, we contract out 3 years on hops so we are covered. We plan no
changes to our recipes.

What is not talked about in that exchange is the price. Supply and demand is a very interesting and well researched economics principal.

My concerns are very simple. What will this do to the small craft brewers that cannot either handle the price increase or the end product is marked up so much that their sales drop as a result? Will this drive enough back to BudMillerCoors to cause a slump in the craft brewing industry long term? And most importantly, though there is talk here of short term increases, will this work out (as example) like gas prices. Raise the price $1 and people get upset, lower it by 50 cents (BTW - I just looked and there is no ASCII code for a ‘cents’ sign - damn engineers). We think “Huzzah! the price dropped” and their little bean counters giggle and know they are making more on every cold one.

Brian and I have had a few email correspondence about the subject and both seem to be saying the same thing. I would interested in his thoughts with his brewing insight to the cost of things, though obviously buying in the smallish quantities he buys in may not be effected as items become unavailable in the homebrew market from time to time anyway.