The Associated Press has good news for us:
Some Yakima Valley hop growers are pulling other crops to plant the beer-flavoring ingredient and planting new acreage in response to a worldwide shortage that caught everyone – brewers, dealers and growers – by surprise.
This story makes me giddy.
Growers are feverishly reconditioning yards and adding new land at an unheard-of pace. Growers are receiving multiple-year contracts with prices front-loaded to help them shoulder the estimated $6,000-per-acre cost to plant yards and also upgrade equipment.
The story further reports that hops acreage expanded about 2,000 acres at the end of 2007 and could grow by another 5,000 this year. Ralph Olson of Hopunion thinks the figure could be closer to 8,000 acres, which would be a 25% jump in acreage.
“It’s basic economics,” said Ann George of the Washington Hop Commission. “When everyone started making orders, we found we had a shortage. The price went crazy. People are willing to spend large sums.”
And she correctly points out that prices will abate (which doesn’t have to mean they will plummet to the ridiculously low prices of recent years) when supply equals demand.
“The big challenge is finding the perfect balance. How do we hit that and keep the brewers happy and not go into oversupply?” she said.