Sunday, January 20, 2008

US hop harvest INCREASED in 2007

Another reader has sent in an interesting analysis—with good links—in the comments section to my Ethanol Fallacy post. As with the response from the Brookston Bulletin, I believe it to deserve its own post. So here:

Missed your blog entry "Ethanol Fallacy" the other day about the hop shortage but I've also been suspicious of the "ethanol" answer. As I understand it, the hop growers as a group, set out to specifically limit supply by voluntarily cutting back acreage, starting back in the "glut" years of the 1990's. A bit of Googlin' around the net will turn up attempts to get state or federal support for such a program, etc., and hop websites will show that acreage went down long before the current Ethanol supports, as you note. This 2005 report from the Hop Growers of America, shows a reduction of US acreage from 43,000 to 29,500 1995-2005.

From everything I've read, it seems to me that because of the '90’s glut's surplus, the hop growers may have *under* estimated actual demand (since the mega-brewers were still using the surplus in the form of high alpha pellets and extract) and that, along with increased demand from outside the US (bad growing year in Europe, increased hop demand from 3rd world, etc.) is the greater cause of the hop shortage.

(Something tells me, too, that despite the growers' efforts to control supply, they're not benefiting as much from current prices as are dealers and other middlemen- as is typical in agriculture, of course.)

For example, how does one explain this USDA report that shows a 4% *increase* in the US hop harvest? [emphasis mine]

As for Jay Brookston's report of corn growing in former hop fields, I , too, am surprised at that since the PNW is not typically “corn country". Perhaps it just seems counter-intuitive that a crop like corn (around 90 million acres planted in the US) could have an effect on a tiny crop like hops (and it’s 30,000 acres)- even given the price supports of corn and ethanol production and the high cost of maintaining hop fields. I still have to wonder if those fields were *specifically* switched from hop to corn, or were they simply taken out of hop production in the concerted effort to reduce hop supply, and, then, planted with the current annual crop that made the most economic sense? Was it “cause and effect”, or two separate agricultural incidences occurring at the same time?

Or, maybe it's just that non-farmers will never truly understand "modern agricultural economic theory" (something they may share with farmers and US gov't bureaucrats -g-).
My Ethanol Fallacy post.

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