Everything You Ever Wanted To Know...

...about hops, and a few things you probably don't care about.

My post last week regarding impending price increases in hops led to a rather interesting discussion on BeerAdvocate.com about the implications for homebrewers and beer lovers in general. One of the respondents posted a link to a 45 page .pdf entitled:

Hops: An Economic Assessment of the Feasibility
of Providing Multiple-Peril Crop Insurance

With an exciting title like that it could only come from the U.S. government. It was prepared by the Economic Research Service, a division of the USDA, for the Office of Risk Management at the Consolidated Farm Service Agency. Mmmmm, Bureaucratic...

This report was initially published in 1995, so the production figures are a bit out of date, but there's still a ton of valuable information in this report including a comprehensive breakdown of maturation time, yield, and alpha acid percentage for the majority of the commercially available strains. That breakdown is followed by a brief history of each of the major cultivars, where they're currently being grown, and maladies that affect each particular strain. Neat stuff, and very educational from a homebrewer/amateur hop farmer perspective.

It also goes on to explain many of the potential weather catastrophes, insect problems, and other insurance-related issues that can befall the farmers. A lot of it is painfully dry if you're not a botanist or uber beer geek, but I found this section on marketing (page 23) to be interesting.

Hop marketing is characterized by several unique features. First, specific quantities at specific prices are contracted for as many as 5 or more years in advance of harvest. At the beginning of October 1994, for example, just 2 percent of the 1994 crop, 9 percent of the 1995 crop, 37 percent of the 1996 crop, 49 percent of the 1997 crop, 57 percent of the 1998 crop, and 77 percent of the 1999 crop remained unsold (Hop Growers of America). Second, spot-market prices are highly variable, plummeting sharply during market gluts and spiking abruptly when there is a shortage. This is caused by the reluctance of brewers to change the hop content in their beer recipes. Hops impart taste, and brewers want to maintain the consistent taste and character of their specific brands. Third, and related to the second, hops are not substitutable as far as brewers are concerned. Further, there are no significant alternative uses for hops except for beer production. Fourth, hops represents a very small portion of the finished product for which they are used. One pound of hops reportedly flavors over 1,500 12-ounce bottles of beer. Consequently, changes in hop prices have a minuscule effect on the cost of producing beer.

What does all of that mean? If I'm reading it right it means this whole "sky is falling" hysteria about hop prices tripling and breweries going out of business is being blown way out of proportion. I'm sure there will be a handful of smaller breweries that will be forced to raise prices because they weren't able to sign a contract before prices rose, or their growth will be temporarily limited by a lack of ingredients, but on the whole it appears as though people are making a mountain out of a molehill. Other breweries may be forced to alter their recipes in order to compensate for a lack of a particular strain, but it seems like there are enough hop varieties out there (with enough overlap in flavor and aroma) that they should be able to come close to the desired flavor/aroma profile through substitution and/or recipe adjustment. They're already forced to adjust recipes to account for seasonal variability in alpha acid percent, and craft beer-lovers seem pretty open to recipes being tweaked, as long as the end result is tasty.

I'm not sure where I'm going with this. Maybe I just want to interject a voice of reason, or perhaps play devil's advocate, and demonstrate that this year's shortage isn't the death knell for Imperial IPA's and other hoppy delights. And if I'm wrong, one possible upshot is that more brewers will respond to the recent interest in "The Session Beer" and begin creating flavorful beers under 5% that are a bit easier on the palate then some of the tongue-scrapers we've become accustomed to.

If anyone reads the report and comes to a different conclusion than me, please post it. I'll admit that I'm not a farmer, insurance adjuster, or hop broker, but the way this report reads I'm led to believe things won't be as bad as some folks are imagining. I really hope I'm right, because a life without hops is a life barely worth living.