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LoungeMachine
10-17-2007, 10:25 PM
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.

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."





Damn it..... I gave up all my expensive vices, just leaving good ganja and select Microbrews, both of which flow nice in thses parts



:gulp:

Prices up 575% ???

Should be able to smoke it at those prices....

jharp84
10-17-2007, 10:27 PM
NOT GOOD! I FEEL THE PAIN!!

LoungeMachine
10-17-2007, 10:30 PM
Next they'll be running the shit up the coast in cigar boats.....

SAVE THE BALES !!!!!

:gulp:

FORD
10-17-2007, 11:10 PM
What the FUCK??



Originally posted by LoungeMachine

"Given the shortage of both ingredients, there's some potential for price increases," said Ray Daniels, a director at the Brewers Association

Does that son of a bitch have to fuck up EVERYTHING??? :mad:

Dan
10-18-2007, 12:37 AM
I Love Drinking Kiwi Beer.:)

Nickdfresh
10-18-2007, 12:57 AM
Oh for fuck's sake! :mad: As if beer in the DC area isn't fucking expensive enough!

Dan
10-18-2007, 01:01 AM
Have You Guys Made Home-Brew At All?

Nickdfresh
10-18-2007, 01:11 AM
My brother has. Quite good actually...

You know it was illegal to brew beer at home in the US until about 1980?

FORD
10-18-2007, 01:16 AM
Originally posted by Dan
Have You Guys Made Home-Brew At All?

No, but I can honestly say that the best night of beer drinking I ever had was at this political fundraiser that was hosted by the local home brewers association. And they brought along keg after keg after keg of this wonderful beer. Ales, Stouts, Lagers, even a Mead that was somewhere around 15% alcohol.

Best of all, I was working the event, so I didn't even have to "donate" money for the beer :cool:

And I wasn't driving.. :gulp: :gulp: :gulp: :gulp:

And since this stuff was as pure as pure can be, no fucking hangover the next day.

I gotta find out what fundraisers those guys have going next year :D

Dan
10-18-2007, 01:19 AM
Originally posted by Nickdfresh
My brother has. Quite good actually...

You know it was illegal to brew beer at home in the US until about 1980?

My Dad Used To Make A Good Drop Back In The Days.It Took Him About Two/Three weeks To Make It,But It Was Very Nice To Drink And It Also Put You On Your Ass Too.

The Laws Are Fine On Home-Brew Down Here And You Can Make What You Want To.:)

Dan
10-18-2007, 01:25 AM
Originally posted by FORD
No, but I can honestly say that the best night of beer drinking I ever had was at this political fundraiser that was hosted by the local home brewers association. And they brought along keg after keg after keg of this wonderful beer. Ales, Stouts, Lagers, even a Mead that was somewhere around 15% alcohol.

Best of all, I was working the event, so I didn't even have to "donate" money for the beer :cool:

And I wasn't driving.. :gulp: :gulp: :gulp: :gulp:

And since this stuff was as pure as pure can be, no fucking hangover the next day.

I gotta find out what fundraisers those guys have going next year :D

Damn,Sounds Like You Had A Great Time.:)

Dad Used To Fill 750ml Bottles For His Brew,He Would Get 12 750ml Bottles To A Crate.

They Call The Crate A Swap-A-Crate At The Bottle Stores.

I Haven't Been Lucky At Brewing Anything Worth Drinking Yet.:D

LoungeMachine
10-18-2007, 02:05 AM
Dan...

When Did You Start Using Caps On Each First Letter?

:gulp:

And I hate to break it you, but that stuff you guys call beer down there is worse than Foster's...

Dan
10-18-2007, 02:25 AM
Originally posted by LoungeMachine
Dan...

When Did You Start Using Caps On Each First Letter?

:gulp:

And I hate to break it you, but that stuff you guys call beer down there is worse than Foster's...

To Your First Question Lounge,I Needed A Change So I Went With The Caps Look For 2007.:)

Our Kiwi Beers Are Some Of The Best In The World.

Steinlager (sometimes known as Steinlager Classic) is a lager-style beer brewed by Lion Nathan in Newmarket, a suburb of Auckland, New Zealand. It has won several prizes, notably at beer competitions in the United States, and is New Zealand's biggest export beer.

Can I Send You Some Samples,Lounge?

Dan
10-18-2007, 02:30 AM
Lounge,What Kiwi Beers Have You Had Then?

scamper
10-18-2007, 12:51 PM
Originally posted by Dan
Have You Guys Made Home-Brew At All?

It's the only way to go, allgrain brewing costs about $12 for five gallons (depending on what you are brewing), even less if you harvest and wash your yeast.

knuckleboner
10-18-2007, 03:24 PM
Originally posted by Nickdfresh
Oh for fuck's sake! :mad: As if beer in the DC area isn't fucking expensive enough!

you live in the DC area?! ha ha!

i always thought that the city of whores and thieves referred to las vegas for some reason...but i think i get it now...:D


and, as someone who's brother lives in new york, i can say that i'm not too upset with the price of beer in the washington region...

ODShowtime
10-18-2007, 08:11 PM
I'm just glad I don't like IPAs that much.

Still bad news though.

I like drinking the neighbor's beer. Dos Equis and Moosehead.

LoungeMachine
10-18-2007, 10:17 PM
Originally posted by ODShowtime

I like drinking the neighbor's beer. Dos Equis and Moosehead.

Not technically beer, but okay.....

;)

Nitro Express
10-20-2007, 04:03 PM
The ethanol boom is a short-term fad. No way can we grow enough corn to fuel our cars and feed ourselves. It's unsustainable.

It works in Brazil because they have a HUGE amount of sugar cane which even after the white sugar has been processed out of it, the molases, and cane juice is fermented for ethanol. I believe they even burn the waste of the whole process to power the distilling opperation.

Sugar cane is pretty damn efficient and when you have thousands of square miles of it, No problem running the country on the stuff.

In North America, no way is corn going to be that way. It's a short-term money making fad.

They need to find a way to turn the piss from beer drinkers into fuel. :D

Nitro Express
10-20-2007, 04:09 PM
Someone needs to make a decent electric car that isn't gay. The range is about 120 miles on a charge, but with new solar panel technology the batteries could charge as long as the thing is out in the sun.

What these cars lack is any kind of nice body styling. They all look gay as hell.

I wouldn't mind an electric car for a daily run around.

The batteries make them expensive though. An internal combustion engine is still cheaper as long as the fuel they burn is cheap. Bombing Iran and $100/barrel plus oil may finally usher in the electric driven car for good.

FORD
10-21-2007, 03:20 AM
Originally posted by Nitro Express
Someone needs to make a decent electric car that isn't gay. The range is about 120 miles on a charge, but with new solar panel technology the batteries could charge as long as the thing is out in the sun.

What these cars lack is any kind of nice body styling. They all look gay as hell.



Haven't you heard of the Tesla Roadster??

http://www.greengeek.ca/wp-content/uploads/2006/07/teslacar11.jpg

http://cartracker500.com/wp-content/uploads/2006/08/2006_tesla_Roadster.jpg

http://www.teslamotors.com/

Dan
10-21-2007, 03:25 AM
http://www.youtube.com/watch?v=zAmJEqBSBqI
<object width="425" height="350"><param name="movie" value="http://www.youtube.com/v/zAmJEqBSBqI"></param><param name="wmode" value="transparent"></param><embed src="http://www.youtube.com/v/zAmJEqBSBqI" type="application/x-shockwave-flash" wmode="transparent" width="425" height="350"></embed></object>

Tui Is A Great Beer And The Women Love It To.:)

Nitro Express
10-21-2007, 03:25 AM
Originally posted by FORD
Haven't you heard of the Tesla Roadster??

http://www.greengeek.ca/wp-content/uploads/2006/07/teslacar11.jpg

http://cartracker500.com/wp-content/uploads/2006/08/2006_tesla_Roadster.jpg

http://www.teslamotors.com/

That one is not too bad. You see all these people going to work and back with just one person in the car. That would do the job and I doubt those drivers are going over 120 miles a day. If the workplace had a charging station for these types of cars powered by some solar panels that would be cool.

Nitro Express
10-21-2007, 03:31 AM
With a $98,000 base price Al Gore could drive one but not the average commuter that's for sure.

FORD
10-21-2007, 04:37 AM
Believe it or not, I was at a locally owned grocery store the other day and they actually reserved one of their front parking spots for electric cars, complete with an outlet to plug in and charge up on their dime while you're shopping.

I doubt anybody would be grocery shopping long enough to completely charge their car's battery, but it's a great idea. And the idea of solar panels on a car is great, as far as I'm concerned, though I doubt they would ever work in Washington state :(

As for the price of the Tesla Roadster, I wouldn't be surprised if it drops eventually. Like any new technology, those who absolutely have to have the first ones on the block get the "privilege" of paying off the research & development costs, and also, it's not exactly mass produced yet.

Al Gore should drive one though. It would look cool as Hell in the campaign videos that he should be making soon.

Dan
10-21-2007, 05:39 AM
Beer And Cars,What A Great Thread.

Cheers.:bottle:

Nitro Express
10-22-2007, 02:25 AM
Originally posted by FORD
Believe it or not, I was at a locally owned grocery store the other day and they actually reserved one of their front parking spots for electric cars, complete with an outlet to plug in and charge up on their dime while you're shopping.

I doubt anybody would be grocery shopping long enough to completely charge their car's battery, but it's a great idea. And the idea of solar panels on a car is great, as far as I'm concerned, though I doubt they would ever work in Washington state :(

As for the price of the Tesla Roadster, I wouldn't be surprised if it drops eventually. Like any new technology, those who absolutely have to have the first ones on the block get the "privilege" of paying off the research & development costs, and also, it's not exactly mass produced yet.

Al Gore should drive one though. It would look cool as Hell in the campaign videos that he should be making soon.

Solar technology is really taking off now. No, the newer solar panels would still work on overcast days but you get more juice on sunny days. They are even talking about making see through windows that generate electricity so the windows on a skyscraper actually generate electricity for the building and since the energy is converted to electricity the window transmit less heat into the building lowering air conditioning costs.

Nitro Express
10-22-2007, 02:27 AM
I used to drive an electric powered forklift when I worked on a loading dock years ago. It was one of the standup ones. It would take off and haul ass! I wouldn't mind a car that drove like that fork lift!