The crop 2001 market was characterized by general uncertainty amongst market players.The high crop 2000 spot prices led brewers to delay purchasing activity until after the 2001 harvest.The September 11th attacks on the United States also increased uncertainty and thus contributed to reduced market activity.

Fairly soon after the 2001 harvest began it was clear that the crop would be more than adequate to meet demand.This was confirmed by subsequent alpha analyses.In Germany pools were formed after harvest to handle unsold spot hops.Subsequent to the opening of the pools,the German market became active.US growers,already at a disadvantage due to the strong dollar and European duty were not willing to sell at the low market levels that were established.For this reason, by summer 2002 all 2001 crop German hops were sold,but considerable 2001 crop US spot hops re- mained unsold.The 2001 Chinese crop was also not sold out as crop 2002 hops began to be processed.

2002 hop acreage was directly influenced by the difference between the 2001 spot market results for Germany and the USA.While German acreage remained stable,over 6,000 acres were removed from production in the USA for crop 2002.

Crop 2002 has come in with normal weight yields and alpha values.We estimate that worldwide alpha production will be approximately 7,800 tons and demand will be for about 7,500 tons, leaving a slight overproduction.This does not include unsold old crop alpha.

Existing hop inventory levels will play a decisive role in shaping the 2002 spot market and future crop business.We estimate that approximately 1,000 tons of alpha from the large crops of recent years are still in brewer hands.In addition,we estimate that a further 1,000 tons of old crop alpha remain in grower and dealer hands.This is all in addition to the assumed overproduction of the current crop.These quantities equal about a third of the world ’s annual alpha consumption. A clearer picture will form when crop 2002 processing and delivery instructions are given.The likelihood of additional acreage reduction for crop 2003 could spur the market as buyers seek to lock in value.

German spot hop pools have been opened,and they reflect differing views on the market.Price levels are already below the initial levels of the 2001 crop spot market.We recommend that brewers who require specific varieties purchase these varieties sooner rather than later.

Buyers who are not bound by variety or growing country will see that the international alpha market will again be influenced by the Dollar-Euro exchange rate.In addition,US growers have