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Supply, Demand, and a Polite Belch

June 26, 2014

The WSJ has a disturbing report today.  Beer prices are at risk of going up.  Well, really hop prices, but it’s going to lead to a rise in beer prices.  I won’t panic, well, not much.

The article is currently locked online, so I won’t quote heavily here.  But I’m obviously not shocked.  I live in an area of about 200,000 people, and the hop fest last weekend had 18 breweries of various sizes pouring beer.  We affectionately call our area, “beervana.”  While that skews my take on the market, I do see that it’s nearly impossible to go anywhere these days and not find a local brew in the stores.  Even if the sizes are small, the mass of new brewers is pushing the limits of supply and demand for hops and grains, and this is likely to raise prices on both component and final price.

This is probably a good thing, at some level.  It’s going to push the industry to look for new, and better, supply options over time, and it’s all being done without government regulation of components.  At least for now.  While BATFE definitely crawls all over the back side of the beer and alcohol process, it has not done a lot of  stomping on the actual creation side, other than some definition work.

But it will push prices up in the short and likely long term.  I’ve been taken aback by the recent increase in prices for both craft and regular beers, and this is likely to only push up farther.  Oddly enough, it’s pushed me to go more often for an inexpensive wine for the evening over a nice beer, and that might server to push prices in different directions over time.

And all of this is happening because people make choices based on their wallets, both in the end consumption, and also in the creation of products.  I think that’s awesome.

So when the congressional hearings start, don’t expect me to be happy…

4 Comments leave one →
  1. June 26, 2014 9:35 am

    Reblogged this on That Mr. G Guy's Blog.

  2. June 26, 2014 9:34 am

    That sucks because I’m not a wine drinker. Although, back in the day, me and a couple of friends downed 10 bottles of Zeller Schwartze Katz one evening. And another time, we went to the 1200 year anniversary of Bad Durkeim Wine Festival.

    I liked Oktoberfest in Munich better.

    • June 26, 2014 10:59 am

      Seeing the price of beer going up in Bend could be hard on our pocketbook, even if we do the wine, too. There’s a lot of industry going on around it, and a rise in prices could affect the community pretty heavily. I’ll do what i can to support local!

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