For some the price of craft beer is already a luxury…but it’s about to get more expensive due to a shortage of one of its key ingredients.
Beer is basically comprised of four key components, hops, yeast water and grain (primarily barley). And 2018 was a terrible year for barley…
One of the world’s biggest barley exporters, Canada, saw its viable malting acreage severely limited by wet, cold weather that followed a prolonged drought. And as Bloomberg explains “When barley gets too wet, it starts to germinate in the field, making it more difficult to convert into malt.”
Those harvest shortages have in turn caused the price of barley to skyrocket, further putting the squeeze on craft brewers already working within paper-thin profit margins.
And Canada isn’t the only region reeling from barley shortages.
Northern Europe’s barley crops were damaged by the unseasonably hot and dry weather that plagued the continent in 2018.
Yields of key barley producers in Scandinavia, northern Germany and the Baltic countries were as much as 30 to 40 percent below normal, according to industry trader Evergrain Germany.
In Scandinavia, hot weather spread wildfires across Sweden. But it also led to barley harvests that were as much as three to four weeks earlier than usual, making them less favorable to the malting process.
For the first time in eight years the European Union faced a malting barley shortage of 490,000 metric tons, according to RMI Analytics.
“By the end of August, UK barley prices were up 37% year-on-year,” The Guardian reported, “while in France they were up 23%,”which puts the world’s barley stocks at their lowest levels since 1984 according to US Department of Agriculture.
The international investment bank, Berenberg, issued a report warning that the cost of a beer would rise in the UK and Europe due to the soaring cost of ingredients. And that was before Canada’s viable malting barley harvest was so severely damaged.
And while big brewers such in AB InBev and Heineken are always better positioned to ride out crop shortages thanks to long-term contracts with growers as well as their sheer scope and scale, this season’s barley shortage is a significant problem for many craft brewers as the Canadian Malting Barley Technical Centre’s Peter Watts explained to Bloomberg…
“Craft brewers, which use as much as four times more malt than traditional brewers, may be hit the hardest because they don’t use supplements. While traditional brewers may spend about 5 cents on malt for a 12-ounce bottle of beer, craft makers face costs of at least 25 cents, depending on the process and variety.”
So get ready to pay a little bit more for your favorite craft beer coming up because at this point rising prices seem inevitable… And we can only pray for a more bountiful malting harvest in 2019.
Beer/barley image credit: iStock 000009745152