So, let me get this straight? Not only do ethanol subsidies support products that requires more energy (mostly hydrocarbons) to produce than they generate, and drive up the price of food in the USA and abroad... they're also contributing to shortages of hops for beer.
Just when you thought government couldn't get much stupider, they find a way to surprise you.
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I simply don't believe that growers are just pushing out hopyards costing about $6,000 per acre to establish in order to produce corn, as the article suggest.
The big problem is disease, notably powdery mildew and downy mildew, which can destroy a crop in about three days. Ten years ago mildew wiped out a fifth of the plantings in the Yakima valley, which accounts for almost three-quarters of American hop production.
Badly diseased plantings have to be removed, and it's quite possible some of those growers plant that land to corn for a year or two to break the disease cycle before attempting a re-plant.
Fungicides to control the mildews are expensive, if only because of the massive plant volume to be sprayed. There's promising research into beneficial fungi antagonistic to the mildews, but it won't solve the problem any time soon.
Mildew eliminated the eastern hop industry a century ago and was accidentally introduced to the Northwest, where it found the climate very much to its liking.
My favorite line in the linked piece: "the hops shortage doesn't impact Molson Coors."
Ryan, it depends on the beer me lad.
Roughly speaking micro brews account for about five percent of the beer market ... and consume something like 70% of the hops. That's at something under a quarter percent by weight in the original wort for a "big" beer like an IPA or ESB.
Rising barley prices -- substitution for expensive corn and soyabeans in feed -- MAY have more of an effect, but the two-row malting barleys tend to be an entirely different market than the six-row feed barleys.
It might, however, make for a good excuse to increase profit margins. Everyone will discover the FAIR price. It's gotta be fair for you, or you won't drink it, but it's also gotta be fair for them, or they won't brew it and then you're really screwed.
Aha! The government has finally found a way to sneak Prohibition back again, using a remarkable grasp of economics and scarcity game theory!
...or maybe not. Never ascribe to malice what can be attributed to ignorance, and all that.
Bart, thanks for the piece of history. As we say we know but far too often regret forget, lots of times what gets printed by the media has been through the "telephone game". Your suggestion jibes with the idea that some hurried reporter put 2 (no hops being grown) and 2 (some farmers growing corn or sorghum or such, and selling it for alcohol) together and get 22 (the alcohol-grain cultivation must have pushed out the hops). The missing mildew part of the story could have been dropped anywhere in the interest of ye olde "simple / single narrative".
Thanks, Bart. Should have known you'd have a worthy take on this...
I would say many commodities are "peaking" a la "peak oil" right now.