Global warming lights a fire under beer prices

(LifeWire) Homer Simpson once admitted, "Homer no function beer well without."

He might be in big trouble soon. Alarm bells are starting to ring worldwide as drought conditions driven by global warming hinder the growth of the main ingredients needed to brew beer — and rising transportation costs make getting them to breweries more expensive.


Jim Salinger, climate scientist for New Zealand's National Institute of Water and Atmospheric Research, predicted in April that climate change is likely to reduce barley production in parts of New Zealand and Australia, where recent droughts have already taken a toll. The trend could easily spread around the world, he hinted. The bottom line: less beer — and costlier beer — in the future.
Like food, beer starts on the farm; like food prices, beer prices are trending up. Brewing requires malting barley and hops, or the female flowers of the hop vine, which yield a yellow powder called lupulin that gives beer its distinctive flavor and aroma. In Britain, the price of barley is up 66 percent since the spring of 2007 due to poor harvests and the replacement of barley crops by crops more suitable for producing biofuels.

There's also a worldwide hop shortage, caused in part by an October 2006 warehouse fire in Yakima, Washington, that has driven up prices anywhere from 20 to 80 percent in the past year, depending on quality. Always subject to extreme swings of supply and demand, the hop market now seems to be stuck in low-supply mode. Home-brewing magazine Brew Your Own reported in March that hops that sold for $2 to $3 a pound last year may now be selling for up to $26 a pound.

Paul Gatza, 43, director of the Boulder, Colorado-based Brewers Association, a non-profit group representing 1,100 of the nation's 1,446 breweries, says he takes the threat of climate change seriously.

"We do see the evidence from Australia, and even here," Gatza says. "Some North Dakota farmers that used to yield 120 bushels of barley per acre are down to 100 bushels."