The Most Dangerous Supply Shortage of All

From reading the news headlines, you might think that the most important supply shortages occurring at the moment are in metals categories (e.g., fasteners, given the whole Boeing 787 delay). Or if you're thinking through future shortage scenarios based on where the price of oil appears headed, you might even suggest the resins, foam and related petroleum-derivative products -- not to mention oil itself within China and other countries with shortages -- are top contenders. But in either event, you'd be wrong. Trust me. The most important supply shortage you need to be aware of these days happens to be one of the critical ingredients in that drink Benjamin Franklin once called "God's gift to man". What's that drink, you ask? If you answered beer, you’'d be correct.

According to a wire article in the Chicago Sun Times, "a decade long oversupply of hops that forced farmers to abandon the crop is finally gone, and harvests were down this year." As a result, "small brewers from Australia to Oregon face the prospect of tweaking recipes or experimenting less with new brews thanks to a global shortage of one key beer ingredient, hops." In addition, rising prices for other categories which help make up the total cost for beer are also rising. The article notes that "fuel, aluminum and glass prices have been going up" and that "barley and wheat prices have skyrocketed as more farmers plant corn to meet increasing demand for ethanol". Yikes! Maybe it's time to crack out the home brewing equipment, though I'll admit that there's nothing that can break up a marriage faster than an over-flowing vat of barley, malt and hops on the stove -- not to mention using your shower or bathtub as storage for supplies (or worse, speaking from past experience, your cool -- 50-55 degree -- back stairwell or porch to store a real lager as it ferments).

Jason Busch

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