Sunday, September 20, 2009

These Hops Are MINE, Not Yours!!!

Kris and I read a Strib story today, "Ethanol Industry Solves New Problem With An Old Remedy," that sent an uncomfortable shiver up our spines. The short-version is that ethanol producers have recently begun adding hops to their production processes to help cut back on bacteria in the saleable by-products. Great. So what are the implications?

I think the ethanol industry in the U.S., in its current form, is a sham. Corn-based ethanol production is not an efficient process (in terms of energy use) and the only way ethanol can compete from a price perspective is with major government subsidies. And besides, Americans like supporting American farmers, even if the support is illogical, non-competitive and a bad idea in the long-term. Government (or political) support is pork-barrel in nature and is driving dramatic spikes in demand that are mostly fabricated and not sustainable. So now, in classic American-agrarian fashion, too many producers will jump into the market, over-build plants, over-produce ethanol. This will drive prices for corn, and now hops, up and will cause short-term shortages and cause more volatility in the respective markets (oh yeah, it'll also cause producers of corn and hops to think, "Hey, we should produce more too!") .

Then, of course, the pendulum will swing the other way and no one will be able to make money at ethanol and a bunch of plants will shutter their doors, causing a precipitous drop in demand for corn and hops, thus causing prices to drop and for corn and hop producers to lose their shirts and go out of business. In the meantime, all this volatility will make it hard for brewers to get a hop supply (and possibly barley too, as we've already seen some impact of ethanol production causing farmers to shift their efforts towards corn and away from barley) at a consistent or predictable price. To further exacerbate this problem, a bunch of douche-bag finance guys will decide to make a living off the price/quantity volatility, causing further problems to the market with their speculative trading and margin-taking.

So, in short, this use of hops could have an impact on hop supply and demand (and thus prices) and could ultimately on the quality of the craft beer I drink (I've skipped a few linkages here). I guess that if I felt U.S. corn-based ethanol production were really a viable fuel additive (in terms of pollution, cost, sustainability, etc.), I could live with this. But what really chaps my butt is that we could see some major changes to the hop industry (many for the worse) in support of a industry whose benefits are suspect.

Man I'm a cranky tool.


  1. Well said Mag, I couldn't agree with you more. Ethanol is such a no brainer. E-85 may look good at the gas pumps but the milage is worse. Aren't we supposed to be making cars MORE fuel efficient? Don't get me started... bottoms up.

  2. More reason to dislike increased use of ethanol: It will increase soil run-off.