A pint is only going up 25 cents, but it's an ominous sign of things to come for craft beer lovers in Missoula and around Montana.
It seems the perfect storm hit the craft-brewing industry this year.
"A ton of malted barley is over $1,000 now," said Juergen Knoeller, brewmaster at Bayern Brewery in Missoula. "Six months ago, a ton of barley was $460."
The giant leap in malted barley prices is due, in large part, to several years of poor harvests, devastating droughts in barley-producing areas such as Australia, and to the fact that despite Montana being one of the best barley-growing regions in North America, barley is a commodity.
"It's a global thing," said Tim O'Leary, owner of Kettlehouse. "It's not just the U.S. We're a global economy now, and malt barley is a commodity whether it's used for feed or brewing. If a farmer can make more growing sunflowers and making fuel oil, that's what they're going to do and not worry about beer drinkers."
The hard line is that breweries are taking on huge cost increases for raw ingredients, though beer prices have stayed relatively stable for many years.
"Six packs of my beer have been $6.79 since I started bottling them," said Sam Hoffmann, owner of Red Lodge Ales. "Now they might jump to $7.99."
The worry is that passing those costs along to consumers might hurt growth, and it's a valid worry as mass-market brewers such as Coors and Anheuser-Busch have seen relatively flat sales for several years, while microbrew sales have risen steadily.
"I'm still hammering out the details on our wholesale increases," O'Leary said. "But we've got to find $60,000 just for malt."
By comparison, Big Sky Brewing Co., Montana's largest brewer, is expecting costs to increase to the tune of $600,000.
"That's assuming nothing changes from now until the end of the year," said Bjorn Nabozney, one of the owners of Big Sky. "We'll have to raise prices in early 2008."
At an annual meeting of the Montana State Brewers Association in Butte on Thursday, the chatter in between agenda items was all about hops.
As in, who's got what and where can I get some?
And a larger concern than rising beer prices is looming for craft beer lovers.
Hops serve much like tannins in wine. They give beer its characteristic flavor.
Some hops produce citrusy flavors, while others are known for their floral properties.
The point is that brewers often use certain hops to produce a characteristic taste in their beer, and when you tweak a beer recipe you start to mess with peoples' palates.
"A sophisticated palate can pick up those changes," O'Leary said. "Even in the bittering hops, you can pick it up."
Brewers often use several varieties of hops to create a beer's signature taste.
Smaller brewers such as Kettlehouse often have more leeway with hops than larger brewers, who depend on a beer's consistency to help sales in outlying areas or other states.
But smaller breweries usually have less buying power and are unable to lock in long-term contracts to even guarantee hops in 2008.
"There are no hops out there," Big Sky purchasing manager Kevin Keeter said after finishing Big Sky's hop buying for the end of the year. "It has been really challenging."
A 10-year surplus of hops, which caused hop acreage to drop, and a devastating fire in Yakima, Wash., last year that destroyed 4 percent of the the nation's hop supply, have given brewers the cold sweats as they look to make backdoor deals to find what they need.
"I've got enough (Cascade hops) to do about 4,500 barrels, almost an 18-month supply," O'Leary said. "But I may have to trade them for some bittering hops at some point."
Eight months ago O'Leary was happily buying bittering hops for about $ 4 a pound.
Today he'd be paying about $22 a pound - if any were available.
In an online brewing forum, some brewers are already calling it quits.
"There was one guy in California who's having to sit back and reassess everything," O'Leary said. "He can't get any hops; there are none."
Many brewers lock in contracts with hop sellers that extend out several years, but this particular shortage could go on as long as three years, Knoeller said.
And that will have one more large effect on craft-brewing industry: You won't find many experimental or "fun" beers out there.
"My job is to run a business that makes a profit so that we can live, grow and survive," O'Leary said. "The profits are great because they allow us to play around a lot more with things like pumpkin beers. I want to try a porter with licorice root in it."
But with higher costs and lower profits, those brewers' specials, experimental beers, seasonal beers and "fun" beers could disappear.
"We'll have to look after our core brands," Nabozney said. "And there will be less of the fun stuff."
Reporter Timothy Alex Akimoff can be reached at 523-5246 or at tim.akimoff@lee.net.
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