Glut of hops unlikely to lower beer prices
By John Foyston, The Oregonian
October 27, 2009, 7:40PM
The hops shortage of 2007 is over, buried in a glut of unsold hops. Don't expect craft beer prices to follow -- the $5 pint and $9 six-pack are likely facts of life -- but hops prices are now so low that some Oregon and Washington growers left hops unharvested this fall.
The humble but, to beer lovers, essential hop."The only time I've heard of hops left hanging was back when powdery mildew hit so hard that some yards weren't worth picking," says John Annen of Annen Brothers Farms and chairman of the Oregon Hop Commission. "But never industrywide -- these are perfectly good hops unpicked because there's no warehouse space and no spot market for uncontracted hops."
Two years ago, failed European crops, declining acreage worldwide, a Yakima warehouse fire and other factors conspired to send spot prices for beer's most distinctive ingredient soaring from $2 and $3 a pound to more than $30 in some cases.
Washington, Oregon and Idaho growers reacted by putting nearly 10,000 new acres into production since then, and the 2008 crop was the biggest in years. This fall's harvest looks to be even better, though figures and spot prices are not available.
Gayle Goschie of Goschie Farms near Silverton sells much of the crop from her 370 acres through contracts to brewers large and small and added 80 acres this year to fill contracts with craft brewers. But like many other growers and brokers, she has some unsold, uncontracted hops this year and says the market is in such turmoil that she hasn't even been offered a price for them.
"It's a complete reversal from a couple of years ago," says Ralph Olson of Hopunion LLC in Yakima, a major hop broker and supplier. "There were always hops available, even at the worst of the crisis, and not just at $30 a pound, either. But everybody panicked and bought all they could."
He still gets questions from growers about more hop vines. "I tell them they were too late two years ago. ... Now, some of that land is going to have to be pulled out of production."
Call it another lesson in the volatility of agricultural crops -- except that hops are more than just another crop hereabouts. To hear an Oregon brewer talk about hops is to understand that.
"We love hops especially, because they're our spice," says Full Sail brewmaster John Harris. "Malt is the base, our stock, but hops are what makes a beer come alive."
Humulus lupulus is a fast-growing, cone-bearing vine that grows best near the 45th parallel -- north of the equator -- that runs through Oregon.
The Northwest grows about a quarter of the world's hops, which is a cousin of cannabis and is useful for almost nothing except to flavor and preserve beer, for which it is perfectly suited. Without the bitterness and aroma of hops, beer would be a sweet barley gruel where microbes thrived, and you wouldn't want that -- especially here in Oregon, a world leader in craft brewing
Before craft brewing, hops were a brokered commodity grown for their alpha acid content -- their ability to add bitterness. Thanks to craft brewers, they're almost a boutique crop these days; growers plant aroma varieties as well as high-alpha hops, and brewers prize different varieties for their unique aroma and flavor profiles. And craft brewers have forged close relationships with Oregon's two dozen or so growers, ties that will grow stronger as mega-brewers buy fewer Oregon hops in favor of derivatives made from super-high alpha varieties grown in Yakima.
Besides, craft brewers use hops lavishly -- bitterness is measured in bittering units, and a craft beer such as BridgePort IPA is about 50 bittering units; a mass-market lager such as Budweiser measures 10 bittering units or less.
Hops by the numbers
Value of Oregon's 2008 crop: $38 million, or about the same as the state's 85,000 tons of apples. Oregon's No.1 single crop in 2008 was alfalfa hay, with 1,680,000 tons worth $357.8 million. Oregon's several varieties of grass seed had a total value of $444.24 million.
Source: Oregon Department of Agriculture
Finding a fresh-hop beer: Fresh-hop beers are the most fleeting of styles, and the season is almost over, but ask at your favorite pubs in case they're still pouring. Also, you can likely still find bottles of Deschutes Hop Trip or BridgePort Hop Harvest in better beer sections.
-- John Foyston
Oregonians celebrate great hops in any number of ways, from a weekend campout/brewdown of homebrewers in September called Hop Madness to community hop-picking sessions at brewpubs such as the Lucky Labrador and Astoria's Fort George in which people bring in their backyard hops to be made into fresh-hop beers. People float fresh-hop cones in their pints and have been known to dive into hillocks of hops, nevermind that they'll itch for the rest of the day.
More than two dozen Oregon brewers celebrate with once-a-year fresh-hop beers. And most made annual pilgrimages to local growers to pick up the hops and take advantage of the Northwest's unique situation, where dozens of breweries are mere hours from some of the best hops in the world.
Kurt and Rob Widmer and a dozen employees spent a September day at Goschie Farms picking hops for their fresh-hop beer; Deschutes and BridgePort sent expeditions to mid-valley hop growers to bring back just-picked hops for their Hop Trip and Hop Harvest beers; and Full Sail's Harris gathered a busload of brewery customers, beer writers and industry types to gather hops for his annual batch of Lupulin Ale.
Lupulin is a fresh-hop ale, as are Hop Trip, Hop Harvest, Vernon the Rabbit Slayer, Killer Green and all the rest, meaning the hops are all or mostly "wet" hops fresh from hopyards. Beers brewed the rest of the year -- or by brewers in the rest of the world -- use processed hops dried from 80 percent moisture to less than 10 percent and then baled, frozen, pelletized or distilled into oil.
Even if we didn't invent the style, more fresh-hop beers are brewed in the Northwest than anywhere else, and those beers starred at fresh-hop beer festivals, including three around the state earlier this month, sponsored by the Oregon Brewers Guild and Travel Oregon.
Zach Wilson works with blocks of compressed hops at Sodbuster Farms.But let's get to the important part: Won't cheaper hops equal cheaper beer? Don't bet on it. Pubs and breweries face all sorts of increased costs, from stainless steel brewing vessels to employee health care, freight and fuel costs, and hops are perhaps the smallest part. Plus, most brewers contracted for their hops for years ahead during the shortage, and those contract prices will be higher than 2009 spot-market prices.
But growers and brewers are generally upbeat about living through this. Christian Ettinger, whose Hopworks Urban Brewery on Southeast Powell Boulevard opened in the middle of four crises -- fuel, hops, stainless steel and the economy -- said his business is stronger and smarter. "It's forcing us to be much better at inventory control, forecasting and developing strong relationships with growers. We're better brewers and businessmen because of it."
-- John Foyston