At bottom:  · WHAT'S PUSHING UP PRICES
Nov 15, 2007 — Steve Stoppard has been teasing his customers for months.

They should enjoy the 95 varieties of hops he carries at his Manchester store, Mr. Steve's HomeBrew Supplies, he tells them, because soon they'll be hard to find.

Well, soon is almost here.

Hops and malted barley - two of the primary ingredients in beer - are scarce on the world market, and the shortages are expected to drive up the cost of beer in the new year.

The big three United States brewing companies - Anheuser-Busch, Miller and Coors - and many craft breweries purchase hops on yearly contracts, leaving home-brew suppliers, such as Stoppard, scrambling.

"I'm pulling my hair out because I can't get the hops I used to," Stoppard said. "I've been telling my customers to brace themselves."

In eight weeks, Stoppard estimates, his hops selection will be reduced by half. When he tried to order 15 varieties last week, a wholesaler had only three available, and he could only buy 25 ounces of each variety at a time.

Home brewers will have to learn how to adapt, he said, substituting specialty hops for more commonly available ones.

"You can substitute," Stoppard said. "The big guys have always known that. We just have to do some educating. If you know what you're doing, you can still brew really good beer."

That message is being echoed by brewmasters at regional microbreweries.


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Beer lovers shouldn't expect a change in what they see on store shelves this year, according to Carol Stoudt, founder of Stoudt's Brewing Company in Adamstown, Lancaster County. But the prices will likely go up.

The cost of malted barley is up about 40 percent this year, while hops have gone up anywhere from 30 to 300 percent, depending on the variety.

The price of all beer is expected to rise in January and February, but makers of craft beer - stronger, more taste-rich suds - might be hit harder.

Christian Heim, the brewmaster at Lancaster Brewing Company, expects the price of a case of beer to rise between 80 cents and $1.50 in coming months. Some specialty beers - especially those that use a lot of hops, such as India Pale Ales and double IPAs - might go up more.

But, brewers say, they don't expect rising costs to curtail the growing popularity of craft beer, both regionally and nationally.

"Fans of craft beer are going to be hard-pressed to go back to the big three and be satisfied," said Bill Covaleski, co-founder and co-brewmaster at Downingtown's Victory Brewing Company.

Stoudt agreed.

"Would you want to save a dollar and drink lighter, less-flavorful beer or just drink less but drink good beer?" she said, comparing beer to other high-end beverages, such as artisan gin or single-malt scotch.

If the hops shortages extend beyond this year, it might change how brewers plan their schedules.

Perhaps, Stoudt said, companies might shift their attention from the full-bodied, high-alcohol beers that have been popular in recent years. Some stronger brews, like double-IPAs, might go to seasonal production.

It could also inspire brewers to innovate, Covaleski said, using ingredients such as spruce and heather to flavor beer, which were more common before prohibition.

Had these shortages struck a decade ago, Stoppard said, his business would likely be in trouble. Now he's hoping wine-making sales, which account for about half his business, will pull him through.

Reach Jeff Frantz at 771-2062 or jfrantz@ydr.com.

WHAT'S PUSHING UP PRICES

·Hops: The flower used to stabilize beer and give it flavor was available in abundance in recent years, lowering the price. This - coupled with the rising price of corn for ethanol - led farmers to switch crops. This year, the global acreage devoted to hops was half of what it was a decade ago, and the market finally caught up.

Alpha acids, which give beer its bitter taste, naturally fluctuate in hops plants based on soil and climate conditions. Most of the world is currently in a down cycle, meaning brewers need to use more hops to produce the same effect.

·Malted barley: This naturally processed barley is used to convert starch to fermentable sugar later in the brewing process. Again, as farmers plant more corn, less acreage is available for barley. The market has also been damaged by fires at two major malted barley storehouses and a decadelong drought that ruined the Australian barley crop.

·Supplies: Costs have risen for glass, used to bottle beer; cardboard, used to package the bottles; and gas, used to deliver the product.

·Weak dollar: Many microbrewers import some or all of their ingredients from overseas, particularly Europe. With a Euro worth $1.46, brewers can't get as much bang for their buck now. Source: Regional brewmasters

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