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Home Brew Forums > Home Brewing Beer > Hops Growing > any truth to the amarillo hop rumor (AB bought amarillo hop farm)
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Old 01-05-2013, 02:55 PM   #1
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Default any truth to the amarillo hop rumor (AB bought amarillo hop farm)

Saw a post on twitter by a brewer at troegs:
"Yikes! No open market amarillo hops after 2014? Word on the street is that AB bought the farm's contract."

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Old 01-05-2013, 08:04 PM   #2
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Could be that they worked some type of deal to buy any 'spot' Amarillo left after all the contracts are filled. If you can't beat 'em, take their hops!

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Old 01-05-2013, 08:15 PM   #3
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What would they want with their hops?

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Old 01-05-2013, 08:19 PM   #4
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Quote:
Originally Posted by BWN View Post
What would they want with their hops?
Maybe an attempt to supply the their 'crafty' acquisitions, while simultaneously depriving the competition.
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Old 01-05-2013, 09:58 PM   #5
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signpost, right on! They'll do anything now that the 'movement' has taken so much wind out of their sails (sales!). I don't want use the word 'desperate' but they have investors to satisfy and it's a great feeling to be on the "winning team" for once in my life!!

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Old 01-06-2013, 02:31 AM   #6
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Something doesn't seem right.

Best as I can tell there hasn't been much in the way of "excess inventory" in the Amarillo market, which should have supported pretty good prices at the farm. Big contracts are usually for much smaller $/unit than what ends up in the retail channels at least - and probably at the craft brew volume as well.

I don't see why the farm would go for that...

Cheers!

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Old 01-06-2013, 02:34 AM   #7
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A offer you can't refuse?

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Old 01-06-2013, 02:35 AM   #8
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If they did, they will up the production and more for everyone.

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Old 01-06-2013, 08:03 AM   #9
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Back during the year of the 'shortage', there really wasn't one ~ it was actually self imposed. Many brewers became nervous after hearing rumors and bought up all the spot hops (the ones left over after all the contracts are filled). This equated to no hops left for those brewers who were starting new breweries. They were told that if they wanted hops, they'd have to get contracted for the coming years and their price would be 'what the market commanded' at that time which was going UP because that's what the market dictated.

So now, the current contract price is say, $10 or more/pound (compared to 5 or 6). In response, farmers planted additional acres because the extra couple dollars/pound made it worth while for them. Those newly planted first year hops normally only produce a fraction of what the mature plants yield but because of a great growing season, the new acreage did very well and there was a bunch left over after all the contracts were filled. What was left over was selling for a LOT less than what those new contracts were paying which pissed a lot of folks off. To make matters worse, keep in mind, that there were a bunch of brewers sitting on stocks of hops that were 'hoarded' (remember the hop crisis) which sent 'spot' prices even lower. So now the guys contracted at 10+/pound are trying to get out of their contracts to be able to buy the spot hops which are less than half of what they're locked in at. The growers then ripped a bunch of those newly planted acres out and things have been pretty rocky ever since, especially with AB-Inbev walking away from all the Willamette contracts they had with the farmers in Oregon.

So, I don't think it would be that far-fetched to imagine some sort of deal being made that certain spot hops would be sold at something of secondary contract price which would possibly be less than the normal contract price but better than spot prices. Business is what it is so just be thankful that we can grow what we can to take that variable out of the equation.

ps: the above isn't gospel but the best that I could put together from talking to different folks.

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Old 01-07-2013, 04:02 AM   #10
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As a hop grower, if a brewery came to me and said, "I'll give you $AA/lb + $BBB,BBB/year to sell me your entire crop..." I would consider taking that offer. It takes a lot of the variability out of farming. Its the same reason grain farmers put up big grain bins. They can sit on their grain waiting for prices to improve.

As a beer drinker, that would suck. It would essentially kill that hop. Amarillo is a fine hop and would have a following regardless of who brews with it. But a lot of the "prestige" came because brewers are featuring the hop in their prize/special formulation/brewing competition beers. When you want to impress the boss when he comes over for dinner, you don't serve mac n' cheese. You pick up a roast and whip out the fine (or in my case, matching) silverware.

Same with Amarillo. Of course the hop is awesome when its featured in awesome beers. With all the craft brewers featuring the hop, it builds up the desire.

Now imagine Goose Island and the other handful of "craft" breweries that AB owns are the only ones to offer beers with Amarillo. They will offer it in every beer they have but all the other craft brewers will latch onto the next big hop. Soon the mystique will be gone and they will have to chase the new big hop.

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