Side Effect: Hops, Corn Affect Beer Prices
December 4, 2007 Beer prices are likely to climb. How does corn affect those costs?
According to an article in the L.A. Times, a global shortage of hops means beer brewers worldwide face either having to tweak their recipes or experiment with new brews thanks to a global shortage of hops. One brewer estimated at least a 10 percent jump in beer prices before the end of the year.
The brewing industry is facing mounting costs as fuel, aluminum, and glass prices have risen over the past several years. Also, barley and wheat prices have skyrocketed as more growers plant corn to meet rising demand for ethanol and others plant feed crops to replace acres lost to corn. Also fueling the increase is a decade-long oversupply of hops that caused farmers to abandon the crop.
While big brewers can generally hedge against rising prices for ingredients and negotiate longer-term contracts, smaller brewers are generally left with whatever remains and may be more affected by rising costs.
WCAX Television in Burlington, VT, says it will be about two months before most of the price increases will likely take effect.
(Sources: L.A. Times, WCAX Television)
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