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.
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