Hop production up 17%. Lower prices unlikely.

It seems like only yesterday that the beer industry was facing a hop shortage. Actually, it was more like a year ago – or maybe even a bit longer ago than that – when bad weather in Europe, a drought in Australia, and eventually a fire in Yakima conspired to send hop prices through the roof. Well, hops (and hop farmers) are a resilient breed. They’ve bounced back very nicely. Question is, will this lead to lower hop prices? Not likely. It’s all very confusing. When brewers talk about hop contracts, I gives me a headache in my eye.

Here is a report from today’s Tri City Herald regarding this past year’s hop production:

Hop production in Idaho, Oregon and Washington in 2009 totaled 94.7 million pounds, up 17 percent from 80.6 million pounds last year and 57 percent above the 2007 production of 60.3 million pounds.

Hops are used to brew beer, with the Northwest’s hops sold worldwide.

Production in Washington increased 18 percent and in Oregon 19 percent, while Idaho’s production increased 8 percent.

Washington growers produced 79 percent of the country’s hop crop for 2009. Zeus and Columbus/Tomahawk were the leading varieties in Washington, accounting for 48 percent of the state’s hops. Acreage in Idaho was up in 2009, but decreased in Washington and Oregon. Yields increased in Washington to 2,533 pounds per acre, in Idaho to 1,943 pounds per acre and in Oregon to 1,948 pounds per acre.

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  1. How did you conclude that lower prices are unlikely? They didn’t say that in the article. Hop prices already plummeted in September (wholesale prices dropped as much as 50% or more from Yakima area hop farms). Maybe you were referring to previous news stories about how some breweries are locked into the old prices due to their contracts? That’s true, but some breweries don’t have contracts like that; and the good harvest definitely led to lower wholesale prices.

  2. Patrick,
    Yep, those who are locked into those higher prices must be feeling rather unfortunate. On the other hand, there are probably hop producers who did some bad speculating. Farming is often a speculative business. That’s what scares me. Perhaps the most important issue is that farmers continue to find hops an economically viable crop. I don’t want to be accused of hating on corn-derived ethanol, but beer goes much better with pizza.

    Your point is well taken and appreciated. I will attempt to be less speculative in the future.