The UK’s independent brewers look set to face a challenging year as prices of some popular US hop varieties skyrocket in the face of surging demand on the back of the ongoing craft boom.
Overall US hop stocks grew 9% over the year ending 1 March, with stocks held by growers, dealers and brewers totalling 140 million lbs, according to the United States Department of Agriculture Statistics Board.
However, supply of varieties commonly used in craft beer such as Cascade and Simcoe have not yet grown to meet demand, pushing prices up for UK producers already bearing the brunt of the weak pound in the wake of the EU referendum, according to brewers.
“Brexit has made a big difference because the power of the pound is less and that’s caused us to have about a 9% increase in hop prices across the board since the EU referendum vote,” says James Cuthbertson, director of Sussex-based brewery Dark Star, which has listings in Waitrose and Morrisons.
Prices for Cascade are up by around 60% compared with last year, he warns, with high prices threatening to lead to some “casualties” in the craft sector.
“They don’t have those economies of scale, so brewers don’t really have the power to go in and promise huge amounts of volume to get discounts.”
The average price of US hops has also risen thanks to a wider shift in growing away from higher-yielding alpha hops in favour of lower-yielding aroma varieties.
“Replacing those alpha acres with higher-value aroma varieties pushed the season average price upward,” says Ann George, Hop Growers of America executive director.
“As the cost of production for an acre of aroma hops is comparable to an acre of alpha hops, growers look at the gross return per acre when making planting decisions.”
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