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**larrymeyer** · March 1st, 2008, 07:36 PM

http://www.charlotte.com/112/story/516825.html

BEER PRICES ARE UP

Hops shortage may bring bitter times

PETER ST. ONGE
pstonge@charlotteobserver.com

South Park MagazineBeer drawn from tap at Moondog's Pizza Shack in Charlotte A worldwide shortage of a key beer ingredient, hops, is causing beer prices to spike, beer batches to be delayed, and talk of your favorite pale ales being forced to (gulp) mellow out.

Already, in Charlotte, retailers are reporting that beers from smaller, "craft" breweries have risen about $1 per six-pack this year, with more increases coming as brewers pass on the cost of a five- to tenfold increase in hops prices.

That's if the brewers can find any hops at all.

"There's none out there to be had," says John Lyda, vice president and brewmaster at Asheville's Highland Brewing, which raised prices on its beers in February and was forced to delay one product, Kashmir IPA, because the hops arrived a month later than usual.

Craft beers, which are made in smaller batches than macrobrews such as Budweiser, have risen in popularity since the 1980s and now are commonly found in supermarkets and restaurants. The intensity and flavor of these beers is often provided by an abundant use of hops, which are small pinecone-shaped flowers that have been critical to beer-making for centuries.

Why the shortage now? It's a classic sift of agricultural supply and demand. "There was a glut of hops, which caused low prices, which caused a lot of people to go out of business," says Ralph Olson, owner of Hopunion, a Washington state supplier of hops to brewers across the U.S. "Now, there's a shortage."

The news gets more bitter for beer drinkers. Recent corn subsidies have lured surviving farmers away from hops, leaving only 118,000 acres worldwide dedicated to growing it. Worse yet, last year's crop was thinned by a drought in Australia and excessive rains in Europe.

"I'm scrounging around the world," says Olson, "and there aren't many out there."

Olson expects farmers to come back to the now-profitable crops, but any surge in hop production likely won't be seen for two to three years.

By then, industry observers say, the beer industry will lose some smaller brewers who lack the ordering muscle to reserve hops year-to-year. Those who survive will experiment some with alternative flavoring products such as herbs, as brewers did centuries ago.

Some are abandoning hoppy spring seasonals altogether, including Fort Collins Brewery in Colorado, which instead opted for a malty Double Chocolate Stout, due in Charlotte next week, said brewer Lewis Thomas.

And our treasured pale ales -- will they lose their bite?

Thus far, there are no reports -- although plenty of worries -- of beers mellowing. Lyda is hopeful that the hops shortage will continue to involve aroma hops, used for flavoring, and not bitter hops. But no one is sure what the next two years will bring.

Except, says Lyda: "Everyone is going to feel it."

The hop: A profile

What is it? A hop is the flowering cone of a perennial vining plant that grows best in climates similar to those where grapes thrive.

How are they used? Hops can be used whole, ground into pellets or slugs, or in a liquid extract form in the brewing process. They essentially provide the beer's "seasoning" and bitterness, and they act as a preservative.

Where are they grown? Hops are grown throughout the world. More than 75 percent of U.S. hops are grown in Washington state's Yakima Valley.

A little history: Hops have been used in beer-making since the eighth century -- and perhaps before. In the U.S., the use of hops in craft brews took off in the 1980s, when the popularity of microbreweries spread from the Northwest across the country. Today, craft brewers can be found in every U.S. state, including more than a dozen in North Carolina. Charlotte, once home to the Johnson Beer Co., currently has no microbreweries.

SOURCES: Hopunion, Beer Advocate