Bah Humbug

The beer crisis. Trouble brewing, from the Economist.

JUST as the festive season gets going, drinkers in America are finding their favourite beer suddenly more expensive or even—horrors!—not available at all. Hit by price increases and shortages, many breweries, particularly the small “craft brewers” and the even smaller microbreweries, are being forced to raise prices, make do with modified recipes or shut off the spigots altogether.

The humble hop, the plant that gives beer its distinctive flavour, is the main problem. Many farmers in the Pacific north-west, where America's hop production is concentrated, have turned to more profitable lines—especially corn, which can be made into ethanol. The decrease in hop production, put at some 50% over the past decade, has sent prices through the roof. Brian Owens, the brewmaster of the O'Fallon Brewery near St Louis, Missouri, says that the variety he once bought for $3 a pound (0.45kg) now costs five times that. Many smaller breweries cannot find what they need at any price. Industry giants like Anheuser-Busch and Miller are better off, thanks to long-term contracts. But even Anheuser-Busch has been forced to raise prices for its six-packs.

Without their supply of hops, some smaller producers are going out of business, bringing to a halt the fastest-growing segment of the industry. Other craft brewers and brewpubs are experimenting with new recipes, hoping their customers will adapt.

The hops shortage is only part of the problem. Things are no better for barley, used to make the malt that yeast turns into alcohol. It too has been ploughed under in favour of corn. Crop failures in Australia and Europe, combined with the weak dollar, have made it harder to replace the shortage with imports. Other price increases, of fuel, glass and metal, add to the pressure. Not such a merry Christmas.