Rising beer prices could leave you tapped out

Brewers blame a variety of culprits.

Among the less obvious is corn, which doesn’t even appear in most beers. High demand for corn-based ethanol has persuaded many farmers to devote more of their fields to corn and less to barley, creating a shortage and the resulting higher prices. Ethanol has also been blamed for higher milk, ice cream and pizza prices.

“It’s become more attractive to grow corn, so farmers have made a choice to do that,” said Ronald Manabe, brewmaster at Tied House.

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Rain in Europe and drought in Australia also withered barley crops. Summer prices for German spring barley rose 50 euros a ton, for example, nearly 20 percent over the previous year’s price.

Doug Odell, owner of Odell Brewing Co. in Fort Collins, Colo., has seen the price of barley — which he called the “backbone of every beer” — skyrocket, and he said he did not know when it would stop.

“It’s kind of scary to think about,” Odell said.

Changing the recipes
It’s been even worse for hops, one of the main determiners in a beer’s flavor profile. Flooding has driven down European yields for the last two years just as historically low prices have led many domestic farmers to abandon the crop.

Hot weather and circumstances also slashed the crop in the Pacific Northwest, where the vast majority of domestic hops are grown. Nearly 4 percent of the entire 2006 domestic crop went up in smoke thanks to a fire at a single warehouse in Yakima, Wash., in October 2006.

“We get online, call hop providers just to see if they have anything we can buy virtually every day,” said Martin, of Brown’s Brewing in New York, which is drastically cutting back production of especially hoppy beer because of the shortage.

“We still have yet to find a solution other than buying in very small quantities, which really doesn’t have much of a future for the next year,” Martin said. “We’re not quite sure what we’re going to do yet.”

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They’re also changing the recipes at Central Coast in California.

“Our brewer will make the adjustment to circumvent the hop shortage to keep the quality and the taste of the beer good and on task,” said Jim Aaron, the brewery’s sales and marketing manager. “We will have to make some adjustments.”

Peterson, Central Coast’s owner, said hops were important for more than flavor — they’re also the main preservative in artisan beers. If prices remain high and supplies remain short, consumers will not only have to get used to blander beers, but they also won’t be able to keep them in the refrigerator for long.

“If it got to $40 a pound, you’re going to see some hop-free beers, and it’s not going to [have] a ‘born on’ date,” he said. “It’s going to be ‘drink by tomorrow.’ ”

With Stacy Daniel of NBC affiliate KSBY of San Luis Obispo, Calif., and Darren Rovell of CNBC. NBC affiliates KYFR of Bismarck, N.D.; KHAS of Hastings, Neb.; KNTV of San Francisco; WCSH of Portland, Maine; WGAL of Lancaster, Pa.; and WNYT of Albany, N.Y., contributed to this report.

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