Brewers Toast Big Hop Crop

(MoneyWatch)  A bumper crop of hops is easing a global shortage of the odd little flower that's a key ingredient in beer.

Twelve to 18 months ago, craft brewers were struggling with skyrocketing prices for hops, which sent microbrew prices soaring by a dollar or more per six-pack. The shortage was due to some macro factors -- the introduction of a new, more-potent variety of hops meant brewers needed less, causing a collapse in demand that led U.S. farmers to quit growing the crop earlier this decade; a poor 2007 crop in Europe; and growing demand for beer in China. There was also some micro ones, such as a big 2006 warehouse fire that wiped out reserves and caused a panic.

But as prices soared -- jumping as much as 10-fold on the spot market -- growers last year responded by increasing acreage, and good weather conditions led to a strong harvest this fall. That's easing prices. In addition, InBev's purchase of Anheuser-Busch has put some hops back on the market; according to reports in California, InBev has opted to cancel A-B contracts to utilize its own sources.

All this is good news for an industry that's dealing with flat sales. Big global brewers SABMiller and Carlsberg have announced cutbacks.