USA: Prices for Aroma hops worldwide to remain stable at high levels
Weekly American Crop Report
By: Douglas MacKinnon
The Aroma harvest has ended in the United States and only bitter hops remain. Harvest typically continues through the end of September in Washington State but many growers in Oregon have already finished. It is impossible at the moment to predict the outcome of the American alpha crop. At this time, it appears that it will be average or better, but that can change. Aroma hop yields are down by 15 percent in some varieties. We can therefore expect prices for Aroma hops worldwide to remain stable at high levels. The American microbrewery industry demand is increasing. Therefore, additional acreage of aroma hops will likely be necessary in America in 2007 to maintain balance between supply and demand. Aroma hops in America are typically not grown on speculation. Growers will likely plant additional acreage only if it is contracted.
A serious concern of growers in Washington State is the labor shortage. Some farms are running with only 85% of their normal work force and that is making harvest difficult. The minimum hourly wage, which increases in Washington and Oregon States with the rate of inflation, is currently over $8.00 per hour to the employee. That does not count additional expenses to the employer, putting the cost at well over $10 per hour. Growers must pay more than minimum to keep good workers on the farm from year to year.
The hop market is on the rise in America and growers are optimistic about prices and are hoping for the return of contracts. Still, with the increased costs of labor and fuel of recent years, prices must continue to rise before growers can reach profitable levels. The prices, which seem high compared to those of recent years, are only now reaching levels where growers may breakeven.
Last week, I created a new online forum for discussing these and other important issues related to the hop and beer industry, which is free for anybody who would like to use it. The address is http://hopblog.blogspot.com/ Please visit HopBlog soon, post your comments and tell a friend. With better information, we can all benefit.
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