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Hops shortage spiking up beer prices

07:50 AM PST on Monday, February 25, 2008

By CHRIS DANIELS / KING 5 News

Hops and barley shortage causes increase in beer prices

WOODINVILLE, Wash. - Beer drinkers, listen up - your next glass or pint could cost you more. 

The price increase coming to store shelves near you isn't due to rising gas prices. Hops and malted barley, two big crops for beer making, are facing major shortages. 

At Red Hook Brewery in Woodinville, spokespeople say their production costs have gone way up. And they aren't alone - other microbrew makers are reporting the cost of beer making is up because hops and barley prices have shot up.  And that means you'll be seeing the difference on store shelves. 

Frank Schuck, Whole Foods regional product specialist, knows his beer and the importance of hops in brewmaking. 

"It's essential, also acts as a preservative," said Schuck. 

KING

A hops and barley shortage this year means beer prices could cost you more.

That goes for malted barley too. 

"It's the initial fuel that feeds the yeast that makes the beer," said Schuck. 

But Schucks also knows both ingredients are at a premium due to several factors and haven't stopped. 

"Droughts in Europe, fire in Yakima about a year and a half ago which destroyed the hops crop," said Schuck. 

Severe weather ruined hops production in Europe, causing many farmers to plant corn instead for ethanol production. It all means hops are now going for $35 to $40 a pound instead of the $3 to $5 this time last year.  Barley rates are also up 25 to 40 percent. 

The production costs are just now trickling to consumers.  Whole Foods has posted a sign saying beer customers can expect "dramatic price" increases, about one to two dollars on every six pack. 

And costs may not go down until this perfect storm of agricultural and market conditions subside. 

"The storm is going to get rougher before it gets any better," said Schuck. 

Hales Ales also have raised prices January 1st about 17 percent.  The major macro-breweries may not feel the pinch because they buy so much of the crops and have different contracts.

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