Two ingredients -- hops and malted barley -- are behind much of the price increases.
Hops produce the chemicals that give beer its distinct flavor. Some varieties are used to bitter the drink. Others impart its floral aromas. Most commercially grown domestic hops come from Washington, Oregon and Idaho.
After water, malted barely is the next-biggest ingredient in beer. It provides the sugars that turns into alcohol when the beer is fermented.
Barley prices have risen because of worldwide demand for grains, including wheat, corn and rice. Philip Sutton, owner of Skyscraper Brewing Co., a small brewery in El Monte, said the price of a 50-pound bag of malted barley had jumped to $22, or 57% higher than a year ago.
Hops prices are soaring even more. Sutton paid $3.40 to $4.70 a pound for hops a year ago. The least expensive hops he has found this year were $12.63 a pound, and he's paid all the way up to $22.45. But that's only if he can find them.
"The hops that we like to use just aren't available," Sutton said. That has forced him to substitute other hops in some of his beer recipes "and that makes a different beer. It's still good but isn't what we would ideally have," said Sutton, who has raised his prices 20% to 30%.
For many years, farmers didn't make much money selling hops. Back in 1996, hop farming peaked at an estimated 44,000 acres.
All that acreage, combined with the planting of higher-yielding varieties, created a giant surplus. That was made worse because the beer-making ingredients that come from hops can be easily stored for years. That drove prices down and pushed farmers out of the business, said Ann George of the Washington Hop Commission.
By 2004, acreage had fallen to a low of 27,742 but has grown slowly since, hitting almost 31,000 in 2007. That wasn't enough to stave off a hops shortage this year that is expected to last into next year. George estimates that farmers will plant 6,000 to 8,000 new acres this year.
The hops shortage is hitting the small, fast-growing craft brewers that have become the most dynamic part of the American beer market. That segment accounts for less than 4% of U.S. beer production but uses almost 10% of the hops, according to industry statistics.
Microbrews are where most beer innovation is taking place, said Gabriel Gordon, owner of Beachwood BBQ.
Gordon has built his eatery around beer. He typically has 23 brews on tap and another 45 in bottles.
Brewers are charging Gordon 20% to 40% more for their beer, and that's forced him to raise prices about 50 cents a glass to $6 or $6.50, depending on the beer.
"I am not looking to get rich," Gordon said. He would rather limit his price increases and "have my repeat customers walk away satisfied rather than feel like they were gouged."
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jerry.hirsch@latimes.com
