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About The daily Astorian. (Astoria, Or.) 1961-current | View Entire Issue (Sept. 22, 2017)
3A THE DAILY ASTORIAN • FRIDAY, SEPTEMBER 22, 2017 Hop stocks continue to outrun demand Oversupply puts pressure on industry By DAN WHEAT EO Media Group YAKIMA, Wash. — Even before this fall’s harvest, U.S. hop stocks are up substantially from a year ago, refl ective of an oversupply that’s put- ting pressure on dealers and growers. Stocks were up 15 percent at 98 million pounds on Sept. 1 versus 85 million pounds a year ago, according to a report released Wednesday by the U.S. Department of Agricul- ture’s National Agricultural Statistics Service. It is the largest percent- age increase in inventory of the four reports showing sup- ply increases dating back to March 2016. The new report shows dealers and grow- Dan Wheat/Capital Press U.S. hop stocks are up substantially from a year ago. ers with 64 million pounds of hops and brewers with 34 mil- lion pounds. “It’s actually a pretty good- sized overage and it was expected. We knew craft (beer) was slowing while aroma vari- ety hop acreage is still increas- ing,” said Pete Mahony, director of supply chain man- agement and purchasing for John I. Haas, a major proces- sor and grower in Yakima. Previous overages, years ago, were high alpha com- modity varieties that keep for years, he said. This year’s overage is of aroma varieties for craft beer. Aroma variet- ies need to be used in a year or two, he said. This past summer, 47 Hops of Yakima, a hop broker, fi led for Chapter 11 bankruptcy protection to shield itself from creditors while developing a restructuring plan to pay more than $7.4 million in debts and remain operational. Doug MacKinnon, com- pany president, blamed the bankruptcy on craft brewers contracting for more hops than they needed. “There defi nitely will be pressure on the entire sup- ply chain, whether grow- ers or dealers. And will there be other casualties? I don’t know,” Mahony said. “Larger dealers are pretty solid. We’ve lived through these markets for decades. Smaller ones may struggle. It’s all about proper management of inventories. Aroma varieties are expensive inventories.” For years the prolifera- tion of small, craft breweries fueled the demand for more aroma hop varieties. While still growing, the rate of craft brewery growth has slowed, resulting in some breweries renegotiating contracts that were based on expectations of higher growth, said Ann George, executive director of Hop Growers of America and the Washington Hop Commis- sion in Moxee. That returns the hops to dealer and grower inventories, she said. George said the U.S. pro- duces more than 80 hop variet- ies, and while there’s an excess supply of some, demand for others is still growing. “The key is re-balancing by changing varieties in response to new contracts,” she said. It takes a couple of years to bring new hops into full pro- duction and for the past fi ve years the industry has been trying to catch up to brewer demand, she said. “Now it appears hop acre- age has exceeded current brewer demand, so it will be important to take the foot off the gas pedal until brewer demand catches up with hop acreage,” she said. Another factor in the over- supply of hops, she has said, is big brewers are losing mar- ket share worldwide because of increased competition from other beverages. The top 10 breweries in the world decreased production by 11.4 million hectoliters — about 301.2 million gallons — from 2014 to 2015, she said. While craft, export craft and import U.S. beer sales were all up in 2016, overall beer sales were fl at, according to the Brewers Association in Boulder, Colorado. In June, the USDA esti- mated Pacifi c Northwest hop acreage at 54,135, a 6 per- cent increase over the previ- ous year. “Hopefully, we won’t see increased acreage in 2018,” George said. Prices of certain varieties have decreased due to plenti- ful supplies on the spot mar- ket, she said. Brown, Buehler stockpile cash for governor’s race By ANDREW SELSKY Associated Press SALEM — An election to choose Oregon’s next gov- ernor is more than a year away and the primary is eight months down the road, but the main Democratic and Republi- can candidates’ fundraising is already going full steam, with a total of almost $2.4 million raised so far. Gov. Kate Brown, a Dem- ocrat, is shrugging off the $500,000 donation Nike co-founder Phil Knight gave in August to her Republican rival, state Rep. Knute Buehler. “Just to give you an exam- ple of the fundraising efforts we do: In my 2016 campaign, we received 20,000 contri- butions from folks across the United States,” Brown said Tuesday when The Associated Press asked her about Knight’s donation and her own fund- raising efforts. “I think it’s really important that many voices be heard, and that one megaphone doesn’t drown out all the other voices.” When the billion- aire Knight’s donation was announced, Buehler, an ortho- pedic surgeon from Bend, said in a statement that he was “thrilled.” “Phil Knight looks beyond narrow political labels — and so do I,” added Buehler, a moderate who has pushed for access to birth control and who voted in favor of an anti-coal bill that doubled the state’s renewable energy requirements. Brown’s campaign has reported raising more than $1.2 million in cash contribu- tions since January, according to fi gures compiled by the Ore- gon Secretary of State’s Offi ce. More than 10,000 contribu- tions have been made since January, said Brown campaign consultant Thomas Wheatley. Though the Buehler cam- paign’s fundraising dates back to early August, when he announced his candidacy, the contributions it has reported already amount to more than $1.1 million, state data show. The campaign has received 2,887 contributions since August, said Rebecca Tweed, Buehler’s campaign manager. Brown fi nds herself in the rare situation of having to run for governor twice in two years. She shifted over from being secretary of state to gover- nor in February 2015, when John Kitzhaber resigned amid an infl uence-peddling inquiry. She then had to run in the 2016 primary and election to fi ll the remaining two years of Kitzhaber’s term, hand- ily beating Bud Pierce, the Republican nominee who is a Salem oncologist. Now she has to do it all over again. But both Buehler and Brown might be experienc- ing a bit of deja vu. They ran against each other for secretary of state in 2012. Brown won, with 863,656 votes to Bue- hler’s 727,607. Oregon Public Broadcast- ing said in August that one of the big questions to keep in mind during the early stages of the gubernatorial race is: “Can Buehler revive the Republican money machine?” So far, the answer seems to be “yes.” Having a deep campaign chest, though, doesn’t always translate into victory. Republican gubernatorial candidates Ron Saxton in 2006 and Chris Dudley in 2010 both outraised their Democratic rivals, Oregon Public Broad- casting noted. Your local janitorial and paper supply...and much more! Aura for Bath and Spa BRIM’S Farm & Garden 31 st Anniversary Check-R-Board Celebration! 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