The troubles in the commodities market is having an effect that makes dealing with the troubles in the commodities market that much harder.
There’s a worldwide shortage of hops:
The shortage — caused by a dwindling number of hop growers worldwide, and exacerbated by a Yakima, Washington, warehouse fire — has forced Gortemiller to use fewer and different hops than before, changing the flavor of his beer. He’s also resorted to beer hacks, like “dry hopping,” in which the hops are added late to the mix, consuming fewer hops and yielding a more consistent flavor.
“When hops were $2 a pound, compared to $20 or $30 a pound now, it didn’t matter. We’d throw them into the boil at various times,” Gortemiller says. “That was an inaccurate way of doing things. We’re modifying recipes and using about 20 percent less hops.”
The beer-brewing situation demonstrates how the global-commodity shortage is spilling over to affect diverse industries in unexpected ways. The hop shortage lives on the outer edges of a food crisis that’s prompted riots across the planet, and last month led U.N. Secretary-General Ban-Ki Moon to implore the world’s governments to increase food production to stave off a 40 percent jump in the cost of staples.
While nobody in the craft-beer industry is going hungry, they are being forced to adapt. There’s no replacement for hops in beer — they give the brew its flavor. But other key ingredients are in short supply, as well. Malt, which comes from sprouted barley, produces the alcohol and body of beer — its prices have doubled along with hops. The price of rice, used by industrial brewers, has charted a similar course.
A world without beer would be a frightening world indeed.
All well and good, except that this is no spillover from the issues causing the prices of rice or wheat to go up. The hops shortage is due to poor weather ruining the crop of hops.
Sam,
True enough - it’s not “spillover” per se, but not all factors are unrelated.
Unstated here is the question of whether rising gas prices are driving up hops, aside from poor weather and that big fire that took out a hops warehouse. (I’d also say that one big reason wheat has gone up has also been poor weather - drought in this case - at a time when worldwide demand is going up.)
I think there’s a mindset, too, of a general agricultural commodities problem. The “spillover”, such as it is, is likely psychological more than actual.
Rising gas prices, ethanol subsidies, and a general psychological attitude prevailing in the commodities market aren’t going to combine to raise price of anything by a factor of ten. The only reason there is a story is that there is a temporary supply problem that will disappear when the next crop is harvested. The increase in price shows that the commodities market is functioning properly to ration a temporarily rare product. Trying to tie that to other themes in the news, the facts be damned, is just shoddy journalism if you ask me. The reporter in this story is sacrificing understanding on the alter of the PANIC NARRATIVE. All too typical.