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Brewers: Keep your eye on a new site being developed by the Brewers Association. I’m looking forward to some great videos!!!

From Cindy at the BA:

Discuss, post, tweet, and comment about craft brewing all in one place: BrewersAssociation.org.

The new website will bring you:
• Private discussion board for professional brewers like you
• Follow the latest industry tweets and post your own
• Share comments on stories, videos, events, & government
affairs

Stay tuned at BrewersAssociation.org.

from m.montgomeryadvertiser.com

January 5, 2009
Alabamians spending less, except for alcohol

State tax collections for the first three months of the fiscal year show Alabamians are spending less, except when it comes to alcohol.

A state financial report covering October, November and December shows the state’s sales tax collections dropped nearly 10 percent from the same period a year earlier.

But beer tax collections were up 4 percent and income from state liquor stores, including taxes and profits, increased 10 percent.

“People don’t like to give up their alcohol,” said Robert Pandina, director of the Center of Alcohol Studies at Rutgers University.

Pandina said Monday it’s customary for alcohol sales to go up in difficult economic times, and several other states that keep close track of alcohol taxes have experienced the same trend as Alabama.

Alabama’s beer tax is a good indication because it is based on volume rather than price. That means the increase in beer tax collections reflects greater sales, rather than higher prices.

I didn’t have the opportunity to flub up this video because a real professional was filming, Chad Parrish. This is an excellent discussion with Mises Institute Economist, Mark Thornton. Mark has been a real friend of the homebrewing and craft brewing community. He authored the only book of its kind, The Economics of Prohibition. Mark is a genuinely great person… extremely intellegent, and I thank Mark and Chad very much for facilitating this video.

How much will the craft beer industry be affected by the recession? This is a question I’ve been wondering about and plan to keep my eyes open for information on the topic. Here’s a bit of info.

GABF: Party at the End of the World? Economy sucks, but craft beer choogles on, by William Brand

Oct. 11, 2008 (Contra Costa Times) — The news this weekend is as grim as it has been for a long time and as I stood at the doors of the Colorado Convention Center last night looking out at the gigantic crowd of beer drinkers at the second session of the Great American Beer Festival, the title of a Jimmy Buffet album kept running through my mind: Party at the End of the World. The Parrot Head was talking about Tierra Del Fuego at the southernmost tip of South America, but I was thinking about all of us today, at this moment, about the rows of bank-foreclosed houses – theres one on my block – of the crisis in my industry – newspapers. News people I know who have been pushed off the edge of the world into unemployment. And I wondered if this fine, beery weekend in Denver is the last dance. Are we like those party-going flappers who danced in the new year in 1930 unaware mostly that their world was gone? Are we headed into oblivion too? Is the world of fine beer gonna disappear into a sea of cheap, light lager. The operative word being cheap. Whew. Hell of a time for a party, huh? A craft beer crash? Not quite yet, it appears. But nobody is talking about double digit craft beer sales growth this year.

Brewers Association Director Paul Gatza, citing the most recent survey figures from IRI, the Chicago-based sales reporting company and the associations own survey of 250 craft brewers, says craft beer volume sales are up 6.5 percent this year. Thats down from nearly 11 percent last year. But total beer sales are up a scant 0.4 of one percent and import sales are down 2.9 percent, the first drop for imported beer in 17 years. Wine and spirits have hit a wall as well. Wine sales are 0.5 of one percent and spirits up 1.8 percent. Prices, of course, have risen, and dollarwise, craft beer sales are up 11 percent. The chart below shows sales increases in supermarkets by regions across the country, with the West trailing the rest of the country percentage-wise. Last dance? Doesnt look like its started yet. I asked both Brewers Association founder Charlie Papazian and Stone Brewing (Escondido, CA) founder Greg Koch about the future of craft brewing in coming months and years. They both were cautiously optimistic. Its too early to tell whats going to happen, Charlie said. Craft brewing volume is still growing. Im convinced that craft beer will survive even in a down market. Beer is an affordable luxury, he said. People might not want to pay $30 for a bottle of wine, biut $10 for a six pack of the really good beer is a price most people will still pay, he said. Greg Koch agrees. Quality will win the day, he said. Good craft beer is a bargain. People will still buy good beer. Its up to craft brewers to keep the quality high. Looking back to the Great Depressionof the 1930s, Charlie, whose books on homebrewing make him an international guru of homebrew, also believes that homebrewing is going to surge even as the economy sags. Theyll get into homebrewing because its a way to get cheap beer, he said. But once they get into, they find out they can make really good beer and theyre off. More craft brewers are born.

Check out these stories published in 1885, 1892, concerning hop prices. Compare this to hop prices today.

DEALING IN FUTURES BEGUN.; OPTIONS ON HOPS QUOTED ON THE HOP DEALERS’ EXCHANGE.

January 12, 1892, Wednesday, Page 9

Dealings in futures were begun yesterday at the Hop Dealers’ Exchange, when options were quoted on New-York State, Washington, Oregon, and California hops for February, March, April, May, June, and July delivery. Brokers seemed shy of each other, and at the first call differences between prices bid and asked ranged from 3/4 to 3 3/4 cents per pound.

I’d settle for the $9 lb hops used to cost when I first started brewing. Cascades at Northern Brewer are currently $52 per lb.

Read the full articles below. They’re interesting.

January 12, 1892 NYT article about hops

June 17, 1885 NYT article about hops

My very good friend Brant (2nd place 2007 Mid-South Homebrewer of the Year!!!) wrote this summary of part of the Dec. 2, 2007 Sunday Session interview with Ralph Olsen. I haven’t gotten to listen to it yet, but Brant’s write up is pretty good, and he said I could post it here. Thanks for the info Brant!

Brant wrote:
I’m behind on The Brewing Network archives, and just now listening to the 12/2/2007 episode. I’m only partway through it, but so far it is very interesting. Ralph Olson, the Hopunion honcho, is interviewed about the hops shortage. If you want to hear it from the horse’s mouth, I’d suggest downloading that from their archives, and giving it a listen sometime when you have about an hour to spare. Fastforward to about the 20 minute mark or so to get to Ralph. They’ve also got Ian Ward, pres of the Brewers Supply Group, later in the show talking about the malt shortage; I haven’t gotten far enough through the show to comment on that, though.

Anyway, from the Ralph Olson part, here are some of the high points I picked up about the cause of the hops shortage: Less than 1/2 of the acreage worldwide grows hops than 15 years ago. That is mainly because hops farmers were run out of business or otherwise sold out (housing developments, strip malls, etc.), or switched to growing other crops. And the reasons for that are because there were way more hops being produced in the past 10 – 15 years ago than needed — 230-something acres were just too much. The important thing to know is that those excess hops were not just disposed of; instead they were converted to extracts. Hop extracts are what the big brewers worldwide use, and it will store for several years without going bad (that’s a very important point). In the past few years, from the overproduction days, there has been an abundance of extract available from crops grown years earlier for the big brewers to buy cheap . That kept hops prices deflated, and that in turn ran many farmers out of business each year. The problem today is because demand for new hops did not pass the reserves of extract until way too many farmers were run out of business, and there are now not enough hops produced to fulfill the big orders. Add that this year’s crop was bad, and as Ralph put it, even if we had a bumper crop this year, we would still be in trouble. Ralph says he has seen this coming for years (dwindling acreage over years’ time), but there was nothing he could do to stop it.

Here are some high points about what is going on today: The big brewers are paying whatever they have to buy up all of the hops, especially the high-alpha ones, and naturally, that is inflating the prices. Yeah, we already knew that. What I hadn’t considered before are the international buyers, whose currencies are stronger than the US dollar — they aren’t really paying as much as we are, so they can offer more money without it costing them as much. And the reason different types of hops cost different amounts of money is largely based on their per-acre yield. Most of the high-alpha hops yield two to three times as much poundage as the flavor/aroma hops, and farmers are going to price them accordingly. For example, Cascade might cost twice as much as, say, Columbus, and Hallertau as much as three time that.

And here are some high points about what we’ll probably see in the future: Farmers will tend to produce high-alpha hops over bittering hops, because that is where the demand is (from the big brewers wanting extracts), many high-alphas can produce in the first year of planting (vs the 2 – 3 years of other types of hops), and the greater per-acre yield. New acreage will be high-alpha hops, and some existing acreage will convert to high-alpha hops. He even speculates that some types of aroma hops might be gone forever. Scary is the Hallertau in Germany, where a wilt disease is pretty much killing off all of them! It will be years before the high-alpha demand subsides, so the aroma hops that craft and home brewers want will continue to be in short supply for a long time. Prices will never return to what they were last year — but that’s probably a good thing in the long run, since they were really too low to keep the needed farmers in business.

I don’t know — I’ve heard some retailers saying things will be fine next year, but I think Hopunion would know better about what is going on than them…