Craft brewers raise glass to U.S. farmers, growing record hops crop

Wed Jun 15, 2016 4:41pm EDT
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By Rod Nickel

June 15 (Reuters) - U.S. farmers plan to harvest their largest-ever hops crop, giving craft brewers who are struggling to match surging demand for beers with more aroma and bitterness reason to cheer.

Farmers expect to harvest 51,115 acres of hops in 2016, up 17 percent, the U.S. Department of Agriculture (USDA) said on Friday.

"That is certainly good news for us," said Benjamin Li Yu, chief executive of British Columbia-based Russell Breweries Inc . "I hope the increase is giving everyone room to breathe."

The United States and Germany are the world's top growers of hops.

In 2015, sales volume of U.S. craft beer rose 12.8 percent domestically and 16.3 percent for exports, while overall U.S. beer sales eased 0.2 percent, according to Brewers Association in Boulder, Colorado.

Small brewers have feared a hops shortage after adverse weather blighted last summer's European harvest. Lager producers such as Anheuser-Busch InBev also use hops, but in smaller amounts.

Craft beer premiums cover rising hops prices, but Li Yu said finding enough supplies has been the biggest challenge.

MillerCoors, owned by SABMiller and Molson Coors Brewing Co , has absorbed higher hops costs for some beers, like Blue Moon, said Warren Quilliam, senior director of brewing, malting and materials. But those costs are offset by low aluminum and fuel prices, and long-term contracts smooth out highs and lows, he said.   Continued...