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Brewer636
05-07-2008, 06:40 AM
Did anyone note the latest report from the USDA on the hops market in the United States?

"Stocks held by growers and dealers on March 1, 2008 totaled 30.0 million pounds, 7 percent more than March 1, 2007."

I'm glad the hops shortage is officially a thing of the past!

ralpho123
05-07-2008, 09:44 AM
Hello Forum,

Just wanted to make a short reply to Brewer636 and his comments regarding USDA Stock Reports for March 1. First of all one needs to understand that the report is a voluntary thing that is not very accurate at times. I looked back at a few years and noticed that the carry over for 2005 was 76 million lbs, 2006 70 million lbs and 08 66 million lbs. At one point the 2007 report actually reported 85 million lbs. Lots of numbers to ponder and believe me I have worked with them for 30 years. They don't mean much to me on a personal level because there is not control on how the numbers are obtained and it doesn't include world numbers. What they can show sometimes is a potential trend, but even that is difficult. When a dealer reports for this report, he is saying what is in his warehouse and not whether it is sold or not. Brewers can be even more elusive. Bottom line is that the shortage is sadly still here and will be for a couple of years. Good news is that I am continually looking for and finding hops around the world and do have a few for sale.

What I am most concerned about with the current crop, is that we have a good one around the world. Basically at this time Europe is sold out and the US is very tight. The best thing for us is going to be a big crop that will put some "spot" hops onto the market. Until the harvest is in however, one has to be patient and take a wait and see attitude.

Cheers,

Ralph Olson
Hopunion LLC

Brewinfo
05-07-2008, 09:47 AM
Ahhhhh haaaaaa...but they don't mention demand in there do they?

ralpho123
05-07-2008, 09:57 AM
Good you caught that part. It really has nothing to do with the demand. It is just statistical numbers that one must make there own judgment on. Again, I don't put too much into these numbers. There are more good stats to look at however if you go to the USAhops website- http://www.usahops.org/

Click on the U.S. Hops section near the top and a pull down sheet stating "statistics" will show up. Once there in there, have at it. Again remember not all stats are that accurate and view them that way. For example for US varieties, some specialty hops won't even show up or I know for example that are not complete. Sometimes growers want to keep somethings to themselves and many of these will get placed in the other or misc. Overall though it will give you some good insight to acreage numbers over the years worldwide etc.

Cheers,

Ralph Olson

Brewer636
05-08-2008, 08:45 PM
Thanks for the note, Ralph. I see what you mean about the unreliable numbers. Is there a source of information that you see as legit, or is it rather whimsical?

The Hop Growers of America Statistical Report does not even keep the numbers straight within the same report (US production numbers on page 7 and 15). None of the world numbers match the IHGC reports, and the UN FAO numbers are different by a huge magnitude.

Even though you mentioned the unreliable basis of the USDA hops report numbers, that seems to be the data that the HGA uses for reporting.

A quick review of various sources says the top two hops producers in the world, Germany and the US (accounting for two thirds of world production) report production increases in 2007 of 8.5 and 5.3 percent respectively.

China may be the unknown, with different sources reporting production levels that diverge by more than 50 percent.

It's easy to understand how the hops story can be so confusing when there isn't a reputable source of data to facilitate free trade. I wish I could believe it didn't matter.

mkunce
05-09-2008, 05:35 AM
Ah Ralph -- rationalization of an oligopolist.

ralpho123
05-09-2008, 09:45 AM
Hello Forum and Brewer636,

I am glad you took some time to look at the numbers and see a little bit of the difficulties in trying to make sense of them. Do keep in mind that people are trying to use good numbers, but often they are subject to change. Some are pretty good and others I just look at. I remember in one of the Statistical classes I took in college a story that is in the back of my brain and it comes forward every once in a while. The stated story was some cause for alarm. Remember I'm from the 60's generation. Anyway the report talked about a rampant problem with female students in the medical graduate program. It reported that 1/3 of the females taking the graduate program were in fact pregnant and unmarried. Quite a statistic indeed until you found out later there were only three female graduate students in the entire program. The stat was in fact correct and yes one student was pregnant and un-married. I like and use stats, but always keep that story with me as I look at them.

Some of the stats are pretty good and some should be thrown away. I would say the numbers regarding US acreage totals are pretty accurate, but when it gets down to specific varieties, there is a lack of good numbers as mentioned in an earlier email. It still though gives a feel for it all and I would say the more major varieties are in the ball park. Understanding where varieties go is of major importance. An example would be if one look at the Willamette acreage, it is far above production than any other aroma hop in the US. Looks like a good hop to go with at least on the surface. Looking underneath a little one would find that a major world brewery buys probably 90% or more of that hop. Going deeper one would find that in the past growers always had a little extra acreage to make sure the contract was filled. Today, they have pulled that little extra out and have planted high alpha hops. The reason being is the price sold on contract is cheap compared to todayís prices and their ration is the brewer will only get what comes off the contracted acreage. So now what will happen if the contract isnít totally filled? My suspicion is that the brewer will try and buy whatever else is available and that might make this hop a little harder to get. Compound that thought with the fact Willamette production has been slowly but steadily declining when it come to yield per acre. I could go on and on, but you start to see that a picture has to be looked at from many angles and there is always the factor to put in that we are dealing with a crop and not nuts and bolts. That factor is Mother Nature and she can be both good and bad when it comes to total production.

The world numbers can be a little dicey especially with countries like China. Germany etc are pretty good. Main thing I look at world acreage is the basic numbers and then say to myself that even if some things are not entirely right, at least we see the trends. The world acreage is a main number that I do pay attention to and it is almost half today what it was around 15 years ago. Good news is that acreage is being put in, but unfortunately many countries got out completely and I don't see some of those getting back in at this time. If prices remain high, who knows? You do need an infrastructure to make it all work and that might be a little difficult.

Hope you get the picture a little more about stats and in the end sometimes you have to make your own conclusions.

Did also see a short note from a Mkunce. Called me an oligopolist. Must say I had to look that up. Just for the record the dictionary said: a person who promotes and supports limited competition within a business market. Sorry, still don't get your point. Don't think I am that important or big in the world hop market. I would say though, that hops are grown on a WORLD market and sold to breweries on a WORLD market. There is nothing personal to it. There are many breweries around the world that want hops now and money is no object. I will tell you they are my competition and they can be tough as they want every hop available.

Hope this gives you a little more insight to stats. In my Hop and Brew school, we talk for a couple of hours on this subject and to try and write about it in a few paragraphs is difficult at best.
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Cheers,

Ralph Olson

tsewong73
05-09-2008, 12:12 PM
I think it's been stated and restated a number of times that we are all, Ralph and HopUnion included, subject to the whims of a global hop market and how it is effected by economic, agricultural and even meteorological forces. The fact that rumors of market manipulation by hop suppliers and/or major brewers are still circulating is disappointing.

I believe Ralph and other suppliers are doing their level best to maneuver all of us through this difficult time. Accusations or unfair characterizations aren't doing anyone any favors and they certainly aren't going to lower hop prices or increase the hop supply. It doesn't matter who or what's to blame, the fact remains that the problem is here and we have to deal with it.

The statistics discussion is interesting and Ralph offers some very insightful observations. Especially that bit about Willamette which really bothers me. I happen to really like Willamette. Anyway, all of this leads back to the fact that the global hop situation sucks and it's going to continue to suck for at least a few years.

While I think it's important to continue the discussions regarding acreage, statistics and the future of the hops market, I also think it's time for all of us to simply hike up our pants and get back to working on ways to survive this hop situation. There's a barley situation riding up fast on the heals of the hop situation. Of course, the accusations, rumors and conspiracy theories are probably going to fly on that one, too, but I say let's skip all that and get down to business.

We have a remarkable, and I believe unique, industry when you consider the collaboration and overall good-will among brewing professionals. While we've all been competing, we've all also been working together toward our common goals. It's been successful enough to help all of us gain valuable market share and make a significant dent in the Bud/Miller/Coors domination. If we continue to apply that competitive/collaborative model to the national beer market while extending it to handle the hops and grain problems, we'll be fine.

Crises and dismal statistics ain't got nothin' on craft brewers!

mkunce
05-09-2008, 01:22 PM
To a small craft brewer in the US, the hop wholesale market is an oligopoly. This is a market structure fact - not name calling.

Brewer636
05-09-2008, 05:59 PM
"Forget it Jake, it's Chinatown."

grs
05-10-2008, 08:49 AM
lol...


No hops for you! You banned! 6 months!


NEXT!!!

nohandslance
05-10-2008, 12:22 PM
lol...


No hops for you! You banned! 6 months!


NEXT!!!

Thats awsome! Good deep belly laugh on that one.

ralpho123
05-13-2008, 01:06 PM
My only question is, why only six months! We do have to keep a little humor in all this don't we. Good to hear some.

Cheers,

ralpho123
05-14-2008, 08:57 AM
Hello all,

Just a short note to say a few things. First thanks for the reply from Mike (tsewong73). I do need the feedback that people are getting the picture. Must admit, this has been the most stressful year in my life, but on the other hand I have been able to find hops. I just did buy some more CZ Saaz and German Hersbrucker from Europe. Good news is a South American Brewery wanted them, but I got the inside track. Paid lots for them, but they should be here in around say 5 weeks plus or minus. Always a problem, buying from Europe is the lag time to get stuff here. They will be pretty good alpha. Also have a few English hops on the way and actually some more German hops in addition to what has been mentioned above. Just a heads up in case someone is in need. The point I am making here, is that deals happen all the time. I have bought lot of hops since November 1 of last year and we will continue to sell product as these deals get made. Biggest problem I have at the moment is the lack of high alpha hops, but I still have a fair amount of aroma hops and as you can see, once in a while get a few more.

Biggest concern for all will be the difficulty in the coming year to get everything pelletized on a timely basis both here and in Europe. Already working on some strategies to help this along, but as a brewer, one needs to be aware of this problem. In past years I always had some excess inventory to send out from the previous crop. The first hops pelletized would be the ones I was out of. About the time those were finished, others would run out and we would start on those hops. This year I will start out with very little carry over and this is going to be a little frustrating to say the least. I like to look at it as just another challenge and must find ways to make it happen.


And no, we aren't going to ban anybody from getting hops at the moment, just a few lashes is all that is needed. What is that saying...."We are going to continue the floggings until morale improves".

Thx

wildcrafter
05-14-2008, 01:05 PM
[QUOTE=

And no, we aren't going to ban anybody from getting hops at the moment, just a few lashes is all that is needed. What is that saying...."We are going to continue the floggings until morale improves".

Thx[/QUOTE

Drinking
Plundering
Wenching
Flogging
Aye, it's a pirate's life for me!

Nice load coming Captain. Keepin' the crews workin' and busy.

When do we hit the next island? Do we have enough beer for the voyage?