Don't Blame Canada: Beer Prices May Go Up Regardless of a Lackluster Canadian Barley Harvest
Bad weather has created some concerns over the future price of a pint.
Admittedly, tensions with our neighbors to the north are running slightly higher than usual, but try as you might, there are a lot of things we can’t blame on Canadians. On that note, earlier this week, when I saw a headline from Bloomberg that “Your Craft Beer Is About to Get More Expensive,” my ears pricked up. As an avid drinker, that’s news that could hit my bottom line. “Miserable weather for Canada’s barley crop means the price of a pint of craft beer is poised to rise,” the article began. Oh no, Canada…
As I read on though, ambiguities began to arise. Far be it from me to question Bloomberg’s business acumen, but was this really “my craft beer” that was about to get more expensive? Bloomberg specifically spoke to brewers in Canada and Ireland, and mentioned places like France and Brazil, but left out any specific mention of the United States. As anyone who has driven through America’s heartland can tell you, the U.S. produces plenty of barley. Are we really that reliant on Canadian malts that it could increase our beer prices?
According to Bart Watson, chief economist for the craft beer trade group the Brewers Association (BA), the good news is that, though American brewers do use Canadian barley, this year’s harvest shouldn’t affect our beer prices very much. The bad news, however, is that beer prices may be going up for other reasons.
Around 20 percent of the malt used by American brewers is imported into the U.S., according to the BA’s figures, and Watson says that “most of that” comes from across our northern border. “Yes, prices are going up a bit in Canada, but no one is thinking shortage,” he explained. As a result, we could see “some effect” here in the U.S., especially with smaller brewers who haven’t already locked in prices with contracts and are buying on the spot. Those companies experience bigger price swings.
However, Watson suggests that brewers have a bigger fish to fry: freight costs. It’s an issue that’s affecting everyone, everywhere: In fact, you may recall that a couple weeks ago, even the international food giant Mondelez blamed shipping costs for a potential price increase in things like Oreos and Ritz.
In the end, that factor could be the biggest reason why pint prices could increase, Watson concluded after speaking with the Brewers Associations’ supply chain specialists. “The overall freight cost environment probably matters more than Canadian barley,” he told me. Granted, it’s not necessarily good news for beer drinkers, but at least it gets the Canadians off the hook.