There is little doubt that hops are or soon will be in short supply. I heard it at “Hop School” in Ralph Olson’s “state of the hop crop” report and I’ve heard it from almost every other quarter, as well. Belmont Station’s blog has a good summary of what Ralph had to say via Dave Wills at Freshops and Rick Sellers at Pacific Brew News has another summary from Deschutes brewer Larry Sidor, as well as a summary of world hop news. There have even been two recent fires at hop kilns, and while crop damage was minimal (though the kilns were destroyed) it still further reduced an already thin harvest. Lew Bryson also posted David Edgar’s summary from today’s Brewers Forum. Overall, there’s some good but mostly foreboding on the future availability of hops, and most notably prices may skyrocket. There simply isn’t enough hops to meet current demand and acreage has been declining for several years.
Enter corn into the mix. When George Bush started touting ethanol he increased incentives and subsidies for farmers to grow corn to make the alternative fuel. If you’re barely getting by growing a difficult and fragile crop like hops, switching to corn with all that federal moola looks mighty attractive. I’ve heard that now from a variety of sources. According to an Iowa State University study, food prices have risen an average of $47 per person as a result of the ethanol surge since last year. So it’s not just hops, but farmers are replacing a number of other crops with corn, too. This has been widely reported to be effecting food prices across the board. But once on a gravy train, few will voluntarily jump off, no matter that the train may be headed for a collision. And corn has been riding those amber waves for quite some time, especially once high fructose corn syrup made its debut in 1980. HFCS is now in what seems like every processed food you could name. So if government policy makes their situation even better, you would expect the corn industry to be overjoyed.
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There’s a little interview today at Retail News online (subscription required) with S. Richard Tolman, CEO of the National Corn Growers Association, trying to allay fears that the corn subsidies are having unintended consequences. And if you want to lay such fears to rest, who better to ask than someone with a totally vested interest in convincing you that black really is the new white. Here’s the forthright honesty he employs to counter numerous claims and studies that suggest “ethanol production is exacerbating environmental impact problems.” Tolan’s answer: “Those claims are simply not true.” Deny, deny, deny.
To the final question, “Critics contend that American farmers will be unable to keep up with demand for corn needed to produce ethanol. What’s the short-term and long-term thinking on this from corn growers?” he answers:
It’s that “planted more acres of corn this year than any time since World War II” line that should concern beer lovers everywhere. More acres of corn means less acres of something else. Believe it or not, when I was in the nation’s “hopbasket” — The Yakima Valley, Washington — last month I saw several large fields of corn. |
Ethanol production has doubled over the last three years, and in 2006 accounted for almost 5 billion gallons. But that’s still only around 5% of total gasoline needs, and corn growers are hoping to increase that to 10%. Doubling again the acreage for ethanol would mean a pretty substantial amount of land on which one thing — hops perhaps — would be converted to grow corn. It seems naive to think that’s not going to raise the price of whatever is no longer being grown on the land that’s now growing corn. So while it may seem odd to blame corn for the hop shortage, it is at least one of the factors that’s contributing to it. I’m certainly no energy expert, but I haven’t seen anything to convince me that ethanol is the panacea so many seem to believe it is. Even if planting all that new corn provides us with 10% of our fuel needs, we’ll pay for it somewhere else, either in higher food prices or a potential beer shortage. Frankly, I’d rather walk, bike or take mass transit than give up beer.
But nothing’s going to change if people continue to give a voice to industry stooges like Tolman with so obvious an axe to grind. Why would anyone, and especially people in the retail business, believe such pernicious propaganda? He’s telling retailers the goods they sell will not go up in price if there is less acreage of land to grow the ingredients needed to make or grow the things they sell. On top of that, he represents the very people changing the way that land is used. That’s shuckin’ and jivin’ of the first order.
Great summary – I think you are right on. The corn/ethanol facet is a facotr, but not all of it. There are many things that are contributing to prices increases. (And I don’t think Ethanol is our future)