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Ohio Craft Brewers Face Possible Hops Shortage
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Ohio’s craft beer business is booming, and so is the demand for the microbrewer’s beloved ingredient: hops.
However, some brewers are concerned that hops could soon be tough to get. Hops prices are increasing, which has created an uncertainty about the supply coming from a limited number of regions around the world. In 2013, the price of hops was about $3.59 per pound. More than double the price from 2004.
According to a report released this month, there were 166 hops farms in the US in 2012, compared to just 68 in 2007. The number of farms has increased, but not as exponentially as the number of microbreweries and craft breweries.
Anticipating a shortage based on supply and demand, a few Ohio farmers have begun to grow their own hops.
A wide variety
When it comes to hops, there’s a wide variety. There’s Cascade, Chinook, Centennial, Golding, Glacier. The list goes on. There are 120 hop varieties worldwide.
“There’s this big race to see who can put the most hops into a beer,” said Eric Bean, brewmaster at Columbus Brewing Company.
Bean expects to use about 25,000 pounds of hops this year for beers like India Pale Ales. Next year he plans on 40,000 pounds of hops.Video: Learn how hops are used in beers
Because craft brewers are guzzling the country’s hops inventory it can be dangerous for brewers to emphasize hops in their recipes.
“We’ve built all of our recipes around specific hops which sometimes is very scary,” Bean said.
A huge share of hops
Microbrews account for eight percent of the overall beer market in the U.S., but their beers contain about four times as many hops compared to the average American lager.
A National Brewers Association expert estimates Ohio microbreweries generate $250-$300 million in annual revenue. That number is expected to increase.
The number of permits the state issued to craft brewers since 2009 has more than doubled to 107.
There’s an uncertainty about the supply of hops that comes from a limited number of regions around the world.
Ohio farmer Andy Pax is trying to change that.
“There’s a big learning curve,” Pax said. “There’s a lot of labor.”
Hops were farmed in Ohio until about 100 years ago when pests wiped them out, just in time for prohibition. Now most hops in the United States come from the Pacific Northwest.
Pax started growing hops about six years ago and has experienced growing pains. He’s encountered some mildew issues and production levels are low, but he has already sold some hops to some small breweries.
“Most of the microbreweries, they are more or less, I don’t want to say forced, but they sign a contract with the big growers out of state, so they need to tell the growers out there what their needs are for the next three years,” Pax said.
A local option like Pax could be helpful to local brewers.
No hops contracts
When Wolf’s Ridge Brewing opened in Downtown Columbus last fall they did not have any such contracts, said owner Alan Szuter.
They had to get crafty.
“We’ve been able to get the hops that we need from the spot market,” Szuter said. “We’ve also been somewhat creative in the use of hops…using some non-proprietary experimental hops.”
Since then, Szuter said he’s established some contracts which have given him some confidence in the otherwise uncertain hops market.
“I’m not that concerned about it,” Szuter said. “Now that’s assuming that they’ll be able to fulfill the contracts. They may be writing contracts they’re not able to fulfill.”
Many local craft brewers said they’d welcome locally-grown hops as long as they’re of high quality.
But before that can happen, Ohio hops farmers would have to be able to process hops into pellet form, a preference among many brewers, said Seventh Son Brewing co-owner Collin Castore.
“Somebody needs to invest in a pelletizing facility,” Castore said. “Then then people could really get the full use out of them.”
Pax said pellets are one of his goals.
“I would love to see the infrastructure developed where a small farmer would be able to send it to a small processing center…kind of like a grain mill,” he said.
The steadily improving US economy has encouraged larger beer companies to ramp up production causing brewers like Bean to stay wary.
“Those guys are going to want their hops again,” he said. “And they have the buying power to be able to have access to what we’re buying right now.”
The irony that a potential shortage is in part due to the recent success of microbrewers isn’t lost on Bean.
“It’s very concerning. [But] there’s a lot smarter people working on the problem than myself,” he said. “I think we’re going to find some solutions, but it’s also going to take a lot of creativity for our industry to deal with how to get continued access to a crop that’s not so easy to grow.”