Hops that were selling for between $3.50 and $5 per pound last year are commanding prices of as much as $20 to $30 a pound today. The soaring hop prices have convinced farmers to start growing hops again, but that doesn't mean relief is right around the corner. New hop vines take time to mature and these newly planted fields won't produce significant crops for at least another two or three years.
The continued increase in oil prices is also putting pressure on beer prices. Higher oil prices increase the cost to farmers of growing the crops as well as the transportation costs of getting the beer to retailers, which all ultimately gets passed on to the consumer.
When it comes to the price hit from these rising costs, small brewers and microbrewers are feeling the punch the most. While prices for even the large beer producers are up this year, their size allows them to weather the cost increases more readily than the microbreweries.
Large brewers like Anheuser-Busch (BUD), Miller and Coors have hedged their expenses to a large degree with large advance purchases of barley and hops, which smaller breweries aren't able to do.
Here are a few steps that you can take to dampen the effect of the higher beer prices.
Buy from larger breweries: The larger beer companies, due to their size, profits and purchasing power, are able to absorb and delay some of the increased costs. Microbreweries, whose size means they are much more price sensitive, must pass on the price increases to stay in business. If you don't mind drinking beer from the larger beer companies, their prices should rise less than those of the smaller beer companies.
