Retrospective Based upon an estimated world beer output of 1,977 MHL in 2008, the supply of crop 2007 alpha acids was less than the world’s demand.

The 2007 hop crops in Germany, the Czech Republic and other European hop growing countries were average in weight and alpha yields. In USA a late outbreak of powdery mildew negatively affected the weight and alpha yields of powdery mildew-susceptible varieties. In Slovenia a tornado devastated a large portion of the hop acreage just before harvest. After harvest, a large handler of Slovenian hops declared bankruptcy which led to additional problems in this market segment.

The undersupply of crop 2007 was much less extreme than the situation following crop 2006, when the supply was approximately 1,080 metric tons of alpha short of demand. Crop 2007 benefited from a larger worldwide acreage and improved growing conditions. Nevertheless, crop 2006 was a contributor to the overall decline hop inventories as brewers had to use their stocks to replace volumes not available on the market. Prior to crop 2007 brewer hop stocks were at a historically low level, which led to a short-lived spot market with extreme, ever-increasing price levels.

These developments led many brewers of all sizes to purchase long term contracts beginning with crop 2008 and extending five or more crop years. The quantity of hops sold ahead reached unprecedented levels. This demand could only be met by planting new acres, especially in the USA. By late spring 2008 approximately 7,000 hectares (17,300 acres) were newly planted to hops worldwide.

Prognosis
The world hop crop estimate for 2008 of 110,000 metric tons is approximately 18,600 metric tons larger than crop 2007. Crop 2008 alpha production is estimated to be ca. 9,439 mt.

World beer production during 2008 has lagged projections, particularly in Asia. For example, Chinese beer sales growth has been approximately half of the 12% that was expected. Around the world many brewers were forced to raise prices as a result of steep increases in the prices of raw materials and other inputs. At the same time, the
increasingly unsure economic circumstances in many countries led consumers to limit their spending. In China, summertime beer sales were surprisingly below expectations. This was caused by changes in government policies pertaining to security surrounding the Olympics as well as by the aftereffects of natural disasters on the economy.
Beer sales growth projections for 2009 are also modest, which will affect demand for hops. In addition, the difficult supply situation of the past two years has led brewers to become more economical in their use of hops via reduced hopping rates or increased usage of isomerized and/or downstream hop products.