Tight Market for Bittering Hops– Beer Brewers Concerned

Emiko Terazono reported this week at The Financial Times Online that, “Drought in Germany, the world’s top producer and exporter of bittering hops, has left brewers and hops merchants on tenterhooks ahead of this year’s harvest of the ingredient that gives beer its refreshing bite.

Fears for the crop come after four years of a tight market. A boom in demand for craft beers has encouraged US farmers to switch acreage to aroma hops, which impart hoppy flavour and scent.”

The FT article noted that, “Prices for bittering hops, also known as alpha hops, have jumped during several years of supply shortages. Most of the world’s hops are traded on long-term contracts, and forward prices for Herkules, a leading bittering hop, almost quadrupled between 2012 and 2016. The spot price has almost quintupled.

Bittering hops have a large amount of alpha acid which is extracted to give both mainstream and craft beers their bitter flavour. Craft beers also use a large amount of speciality aroma hops, with brewers using between four to 10 times more hops than the average lager.”

This week’s article added that, “The US is expected to have a bumper hop harvest this year, but the planting area for bittering hops fell more than 13 per cent over the five years to 2016, while the acreage for aroma hops jumped by almost a third, according to the International Hop Growers’ Convention.”

Ms. Terazono also pointed out that, “Brewers and beer companies are unlikely to pass on the hop cost increases, but if climate change leads to the need for irrigation for growers, that production cost increase could result in higher beer prices in the long term.

“The rise in bittering hop prices is expected to prompt farmers to increase their planting of high alpha acid varieties in both Germany and the US.”

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