Cheer for brewers as late rain saves German hop harvest

HAMBURG (Reuters) - Late summer rain has saved Germany’s hop crop, meaning brewers should now have enough of the key beer ingredient, the head of German-U.S. global hops trader Barth Haas Group told Reuters.

FILE PHOTO: Hops are pictured in southern Germany, in this September 20, 2010 file photo. REUTERS/Michaela Rehle/File Photo

Brewers in west and east Europe, Asia and Africa rely heavily on German hops and there had been concerns of shortages amid growing demand due to the popularity of “craft beers” and a lack of stockpiles.

“The harvest in Germany was only about seven days away from disaster because of dry weather in June and July,” Stephan Barth, managing partner of Barth Haas, said.

Germany is the second largest producer and provides 75 percent of the world’s hop supplies with the United States, where the harvest is looking slightly above average, Barth said.

“Rain in August meant we were saved by the bell and I expect an average German crop,” he said, adding that along with U.S. crop there would be “sufficient market supply” although prices would remain high.

Hops are one of the main ingredients of beer along with water, malt and yeast, and Germany and the United States both export about 26,000 tonnes each year.

Although harvesting is now beginning in Germany’s hop producing regions, it is still too early to assess the quality of this year’s crop, especially the key alpha content which gives beer its bitterness, Barth said.

But Barth estimates Germany will harvest around 39,200 tonnes of crops in 2017, only slightly down from the 42,700 tonnes harvested in 2016.

The United States is forecast by Barth to harvest some 45,000 tonnes, up about 5,000 tonnes on 2016, but with harvesting also just beginning.

“Hop supplies for brewers will be adequate but I expect spot market hop prices to remain at current high levels because of small inventories and strong demand,” said Barth.

Global hop crops in the past five years were below demand and inventories had been used up, with global demand growing by around 1 percent a year due in part to the rising popularity of craft beers, Barth said.

“The 2-2.5 percent share of world beer market held by craft beers consumes around 20 percent of the hop harvest,” he added.

Craft beers are produced by small, independent brewers using traditional methods which require more hops.

Popular styles such as India Pale Ale can use six times the volume of hops used in the mass-produced lagers from which they have taken market share.

Reporting by Michael Hogan; editing by Alexander Smith