09/16/08 Hopping on Hops

Hopping on Hops. I'm Greg Martin with today's Line On Agriculture. I really have never known much about hops unless you count the gallons of beer that, well you get the idea. Hops are kind of a mystery to a lot of folks but did you know that the two major hops producers are Germany and the U.S.? GEORGE: All of the U.S. commercial crop is grown in the Pacific Northwest at this point in time. There are a few miscellaneous, very small producers scattered around the rest of the United States but generally tied to a local craft brewery or something of that sort and those hops don't really go into the commercial trade. So it's here in the northwest and of that, 75% of the acreage is here in the Yakima valley. That's Ann George with the Washington Hops Commission. The hop industry has just come off of one of the worst shortages ever. But there was a lot more to the story most of us never heard. GEORGE: Some new varieties that we in the trade refer to as the Super Alpha varieties were released and this wasn't just here. This was Germany and basically everywhere around the world and growers dutifully replaced their old High Alpha varieties with these new Super Alpha varieties on an acre by acre basis. And low and behold we managed to very quickly out produce the annual demand for alpha acid which is the bittering agent that gives beer its traditional bitter flavor and resulted in a pretty dramatic surplus worldwide which depressed prices to below the cost of production. They sort of grew themselves out of a market. GEORGE: It took us about a decade to work ourselves through the oversupply situation and we were only able to do that by reducing our acreage worldwide to below the annual demand in order to use up the carry over supplies. Of course with that, the prices fell dramatically. After the supply was depleted and there was a return to a current situation, the brewing industry failed to step forward with better prices. GEORGE: So our growers being fairly dire financial straights after 10 years of prices at lower than the cost of production were not able to go into an expansion mode and convince their bankers to loan them the money necessary to expand their acreage without having contracts in hand from the brewers. Tomorrow we'll take a look at how hops are grown and harvested. That's today's Line On Agriculture. I'm Greg Martin on the Northwest Ag Information Network.