OK, now this has gone too far.....

[ARCHIVED THREAD] - OK, now this has gone too far.....

Posted: 6/3/2008 9:06:00 AM EDT

www.kirotv.com/money/16463952/detail.html

Biofuel Sends Cost Of Beer Rising
David Quinlan
KIRO 7 Eyewitness News Consumer Reporter

POSTED: 2:29 pm PDT June 2, 2008
UPDATED: 2:34 pm PDT June 2, 2008

SEATTLE -- First it was gas prices. Then groceries. Now, the price of beer is soaring.

Consumer Investigator David Quinlan says that spells trouble for some of the 80-plus micro-breweries in Washington state.

Not too far off the main drag in Anacortes, on the corner of Fourth and Commercial, Allen Rhoades serves up his award winning I.P.A.

"This is what a good pilsner looks like," Rhoades says. "We're charging $4.50 a pint here."

At least for now. But Rockfish Grill and other Washington brew-pubs are hurting.

"I have never seen anything like it," Rhoades says.

A worldwide shortage of malted barley and hops -- beer's main flavor ingredients -- has small brewers worldwide struggling to stay afloat.

Arlen Harris with the Washington Beer Commission says farmers are now growing more corn than hops and barley because of the recent demand for ethanol as a fuel additive.

"The beer prices are going up," Harris says.

And then there was the 2006 hop fire in Yakima, where four percent of the nation's total hop yield was destroyed.

"It hits us all in the pocketbook, and we pass it on to the consumer," Harris says.

And it shows. Beer prices nationally have risen as much as a dollar in some stores.

At Baron Brewing in Seattle, "Our prices have gone up 70 percent in a year," said Jeff Smiley.

Smiley struggles to brew his 2,000 barrels of German beer each year.

Quinlan: "How do you stay in business?"
Smiley: "It's not easy. It's becoming harder all the time."

Smiley used to pay $5 a pound for hops. Now, he's paying anywhere from $20 to $40 a pound.

Quinlan: "So how valuable is this stuff? You're not going to believe this, but you're looking at $30,000 worth of hops here. That's enough to buy a luxury car."

And while serious beer drinkers may not mind the extra cost -- "Compared to gas prices! no comparison!" says one customer -- brew masters are forced to tweak their recipes and experiment more.

Rhoades: "We can overcome it, change the beers we make, put in the ingredients besides hops."

The Washington Beer Commission says the shortage will eventually pass. In Yakima, farmers have already planted 7,500 new acres of hops.

But it could be at least a year before beer prices start to drop off.

It crosses the line when they start f-ing with the beer!

Posted: 6/3/2008 9:11:42 AM EDT

[#1]

Welcome to yesterday!

Posted: 6/3/2008 9:33:57 AM EDT

[#2]

He's alive!

Well, I have noticed that the price of my Moose Drool has risen ... that bites. Guess I'll have to start brewing my own again.

Posted: 6/3/2008 9:34:30 AM EDT

[#3]

I have two thoughts, switching food production to fuel production has to be carefully balanced, and it's not that bad there are too damn many over hopped beers anyway. I have IPAs at tastings where it was as if they'd stuffed the glass full to the brim with hops then added a couple of drops of water.

Other than that it's not exactly a new story.

Last updated October 16, 2007 11:11 p.m. PT
For drinkers of craft beer, prices may soon be hopping
The costs of key ingredients are taking off

By DAN RICHMAN
P-I REPORTER

A flower called hops makes beer both flavorful and bitter. Those sensations make hops-heavy India pale ale, for example, a favorite drink from many of Washington's 83 small, independent, traditional breweries.

Also bitter: possible price increases from those craft breweries over the next few months.

Hops and malt, a form of barley essential to fermentation, are both in short supply nationwide. The shortage is caused by poor crops, high demand, the weak dollar and the increasing popularity of ethanol, which has prompted farmers to plant corn rather than hops or barley.

"Given the shortage of both ingredients, there's some potential for price increases," said Ray Daniels, a director at the Brewers Association, a trade organization for craft breweries. "In another two to three months, we'll have a better idea where everyone is."

The price increases could have significant effects, because Washington residents buy 10 percent of their beer from craft brewers, and most of those brewers sell much of their product in Washington. This state produces more craft beer than all but seven other states, says the association: 4.78 million gallons in 2006.

Price increases are less likely from larger commercial breweries, such as Anheuser-Busch, because they use less hops, some brewers said.

Hale's Ales Brewery in Seattle, known for its Mongoose India Pale Ale, next year could end up paying 75 percent more for its malt, and it's seeing prices for hops rise to $20 per pound from $3 per pound, said production manager Rudyard "J." Kipling on Tuesday.

"I've been doing this for 18 years with Hale's, and this is the first time we've seen this kind of jump," Kipling said. "Prices are crazy."

Contracts to buy both commodities in advance can lock in prices, and with production of 372,000 gallons per year, Hale's is big enough to have negotiated good contracts, he said. But signing a contract entails the risk of buying more than is needed, which could have its own costs.

"We have to be profitable, so we have to pass this sort of increase on," Kipling said. "I'm pretty convinced our prices will have to go up," possibly by between 50 cents and $1 per six-pack, he said.

A short-term contract on hops is protecting Seattle's Pike Brewing Co. against having to raise prices right now, said co-owner Charles Finkel. But his malt prices aren't locked in, and possible jumps in future hops prices have him worried.

"We are hop-heads in Washington!" he said.

Imparting tastes and aromas such as citrus, spicy or earthy, hops are a major contributor to a beer's distinctive taste. And thanks to a large dose of hops, Finkel's India pale ale measures 65 "bitterness units," compared with mass-market beer's 11 or 12.

With a vital commodity like hops available only in uncertain quantities, "people are saying India pale ales will go up exponentially in price," he said.

Pike Brewing raised the price of its six-packs recently, to about $10, which puts it among the most expensive craft beers. So it's not planning any further boosts for now.

"It seems obvious now that we did the right thing, because others will have no choice but to raise their prices," Finkel said.

At Mukilteo's Diamond Knot Brewing Inc., huge jumps in contracted hops prices "have put us in a cash-flow crunch," said Vice President Bob Maphet.

"We have to pay tens of thousands of dollars right now for something we won't use until next year, and we're trying to figure out how to pay for it," he said. "Where there's an increase, everyone needs to find a way to pass it on. The impact could be higher beer prices, simple as that."

Hops are a worldwide market, with the Pacific Northwest growing virtually all those produced in the U.S. About 70 percent of that crop comes from the Yakima Valley, said Ralph Olson, owner of Hopunion LLC, a Yakima-based seller of specialty hops.

Worldwide hops acreage of 230,000 acres in 1994 shrank by 51 percent, to 113,000 acres, in 2006, because the crop sold for less than the cost of production, Olson said.
Hale's Pale Ale
Zoom Scott Eklund / P-I
Brandon Ballard puts the final case of Hale's Pale Ale onto a pallet at the brewery in Ballard.

In 1978, he had 250 local growers. Now he has about 50, all of them much larger. Local farmers were lured to plant more lucrative crops, such as cherries, apples and grapes, or to sell their land to be built on.

The reduction also resulted from a glut of hops, which lowered the price. The supply shrank as growers withdrew, in Olson's view.

"Now all of a sudden everyone woke up and said, 'Oh, we need hops!' and all those (farmers) are gone," he said.

Malt, which brewers require in far greater quantities than hops, is the main ingredient in beer aside from water. Created by germinating and then roasting barley, it produces enzymes that help convert sugars into alcohol.

The tight malt market is resulting from a worldwide barley shortage, said Brad Loucks, a general manager at Vancouver, Wash.-based Great Western Malting Co.

Europe's 2006 crop was ruined by heavy rains, while Australia's was cut by a severe drought and Canada's was "just average," Loucks said.

"The malt is available -- the problem is the price," he said. Barley prices are at all-time highs because of the short supply, he said.

Because ethanol is such a hot commodity today, "farmers are saying 'Screw the malt; we'll just grow corn,' " said Hopunion's Olson.

At the same time supplies of hops and malt are low, demand is at a record high. Imported and craft beers now account for 17 percent of beer consumed in the U.S., up from less than 1 percent in 1978, said Pike Brewing's Finkel.

"Supermarkets depend on craft beer for their profitability, and knowledgeable people depend on it for their gastronomy," he said.

The intricacies of commodity trading can be hard for brewers to understand, and that's frustrating to some of them.

"Sometimes the commodity sales people want to raise their prices so they can make more profit," Finkel said. "I've been told that hops are profitable and that they aren't, so I don't know who to listen to."

Brewing technology is wringing ever more flavor out of fewer hops, and breweries are experimenting with new recipes to compensate for lesser quantities of hops and malt. But meanwhile, even suppliers stand to lose if craft brewers' prices rise too high.

"I'm wrestling every day on how to keep hops coming in," said Olson. "It's an uphill battle, but I want some beer too, you know."
P-I reporter Dan Richman can be reached at 206-448-8032 or [email protected].

Posted: 6/3/2008 2:27:19 PM EDT

[#4]

Holy carp this could be worse than Y2k!

Posted: 6/3/2008 2:50:11 PM EDT

[#5]

Quoted:
Holy carp this could be worse than Y2k!

Indeed

Posted: 6/3/2008 2:54:17 PM EDT

[#6]

Quoted:
Holy carp this could be worse than Y2k!

+106

Posted: 6/3/2008 3:17:40 PM EDT

[#7]

Quoted:

Quoted:
Holy carp this could be worse than Y2k!

Indeed

What do you care you don't drink beer anyway.

Posted: 6/3/2008 3:31:59 PM EDT

[#8]

Quoted:

Quoted:
Holy carp this could be worse than Y2k!

Indeed

What do you care you don't drink beer anyway.

Oh christ... here we go again... Yes, AND I'm from C A L I F O R N I A too ....

Posted: 6/3/2008 3:50:15 PM EDT

[#9]

Quoted:

Quoted:
Holy carp this could be worse than Y2k!

Indeed

What do you care you don't drink beer anyway.

Oh christ... here we go again... Yes, AND I'm from C A L I F O R N I A too ....

California is ok by me, but drinking Coors lite is not!

Posted: 6/3/2008 3:55:15 PM EDT

[#10]

Quoted:

Quoted:
Holy carp this could be worse than Y2k!

Indeed

What do you care you don't drink beer anyway.

Oh christ... here we go again... Yes, AND I'm from C A L I F O R N I A too ....

California is ok by me, but drinking Coors lite is not!

Well then Dino.. I don't know what to tell ya'... I am who I am.

Posted: 6/3/2008 4:26:36 PM EDT

[#11]

dont worry, ethanol will be gone in five years, once the sheeple realize how much of a difference it is making in the price of food, that it pollutes more than straight gasoline from the pollution involved in making it, gas milage is worse, it causes a lot more damage to engine components it'll go away. hooray for beer!

Posted: 6/3/2008 4:36:36 PM EDT

[#12]

How come no one bitches about big agriculture? Those motherfuckers are the ones on the take from the Government who has created an artificial demand for their product

Gee, I wonder why the farmers pushed hard for corn ethanol.

[ARCHIVED THREAD] - OK, now this has gone too far.....

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