Dan Mitchell, the owner of the Ithaca Beer Company, knew a problem was brewing last summer that would put every beer his company created in jeopardy. Hops, the small, pine cone-shaped flower responsible for creating different flavors and aromas in beer, was running low in stock — not only in his warehouse, but all around the world.

“Hops were so low in price for a long time, allowing people to buy as much as they needed,” Mitchell said. “Suddenly the prices were going up, the stock was diminishing and it’s whose willing to pay for it now?”

While the Ithaca Beer Company is still able to mix and blend the ingredients necessary to make their Apricot Wheat and Pale Ale, many small breweries around the country can no longer find the specific type of hops they need at a price they can afford.

In Syracuse, the Middle Ages Brewery had to pay 400 percent more for a variety of hops essential to their flagship beer, ImPaled Ale, after a contracted grower couldn’t give the company all of the hops they had guaranteed at the beginning of the year. Up until November, owner Mark Rubenstein had been preparing for the worst as the thought of closing the brewery

almost became a reality.

“You can blend different types of hops to try and make it unnoticeable to the public, but I didn’t want to compromise any of our beers,” Rubenstein said. “… There will be certain hops you won’t be able to buy next year because bigger breweries are buying them up.”

The major beer players like Anheuser-Busch, Coors and Saranac saw the hops crisis coming and bought out the remaining supplies, Rubenstein said, leaving his brewery in shambles. Recent news from the Boston Beer Company, the maker of Sam Adams, might give hope to beer companies in otherwise grim situations.

Jim Koch, the owner of Boston Beer, announced Feb. 14 he would sell 20,000 pounds of hops that Sam Adams won’t need in the next year to small breweries around the country. He’s selling it at a price well below market value simply to salvage breweries that were on the brink of folding.

Last summer, Mitchell was still scrambling to find a hops grower that could offer a supply of the 10 to 15 varieties of hops the company needs, but so were hundreds of other brewers from Maine to California. Bad weather during harvest seasons, a fire in a hops warehouse in Washington in October 2006 and hail and sleet storms in the Czech Republic had destroyed what once was a vast supply of hops around the world.

As the crisis unfolded, Mitchell was able to find an answer to his problem and locked into a contract guaranteeing hops for 2008. With the limited hops supply came much higher prices, which is bad news for beer makers and beer consumers.

“Six packs are going to go up at least a buck in the grocery store,” Mitchell said. “We have to pass on the increases in price we are seeing for the hops. Plus every other input like malt and barley that we use in our beers is going up in price as well.”

Senior Adam Brady said he is disappointed by the price increase but doesn’t think college students will drop the beers before dropping the extra dollar.

“It’s all a matter of preference,” Brady said. “If you really like the beer, you will be willing to pay the extra dollar. But the beers college kids drink don’t usually have hops in them, so most college kids won’t be affected.”

Brewers around the country will continue to deal with the dark side of a “perfect storm for hops” for the next couple of years, says local hops grower Rick Pedersen, who has helped supply a small portion of hops to the Ithaca Beer Company for the last five years.

The “perfect storm” is actually benefiting Pedersen. His half-acre crop in Seneca Castle, N.Y., has increased to 10 acres during the past seven years and has never seemed so lucrative as interest from breweries is skyrocketing.

“I used to get two phone calls a year asking about hops,” Pedersen said. “Now, I get them once a week. Heck, it might be twice a week, and from all over the country, too.”

Pedersen’s phone probably wouldn’t be ringing at all if not for Mitchell. The Ithaca Beer Company first locked into a contract with Pedersen to create a Double India Pale Ale made entirely of locally grown New York state hops. The move established a reason for Pedersen to expand his hops crop.

“I had quite a bit of resistance at first to my product,” Pedersen said. “It didn’t take off until Dan Mitchell wanted to use local and regional inputs in the Double IPA. He was the spark plug.”

Since then, Pedersen has continued to produce more hops every season to supply the Ithaca Beer Company’s Double IPA. While the cumbersome work involved in a crop is usually done with machines, Pedersen does it all by hand. Stringing trellises, pruning the long shoots of the plant and hand-picking the finest hops flowers during the harvest every August or September leaves Pedersen in the fields from sun up to sun down.

The intense work is paying off now. Pedersen is providing hops to seven or eight different breweries from Maryland to Massachusetts to Pennsylvania.  

“I’m going to do well over the next couple of years,” Pedersen said. “But in 2010, if everyone goes nuts and starts growing, the hops prices might

tank again.”

Pedersen has found himself on the positive side of an otherwise gloomy story for beer lovers.  Luckily for the Ithaca area, Mitchell said, the Ithaca Beer Company will continue to produce.

“We aren’t going to change anything we do,” he said. “We just have to raise the price a little for now.”