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Market Update

NORTH AMERICAN BARLEY CROP REPORT

August 5-12, 2022: Harvest is underway in the US and Canada, and the first quality samples are starting to arrive at Rahr Malting Co.’s collecting facilities.

The latest heatwaves will affect quality only in very late planted barley, and most of the volume is expected to be acceptable to good quality.

Although climate conditions can drastically change expectations, we anticipate better yields and quality than last year’s harvest. Drought has been reduced to a small area in north-central Montana, and some in southern Alberta/Saskatchewan, but not as severe.

For more barley crop progress updates please refer to the following resources:

USDA Weekly crop progress

Saskatchewan Weekly crop progress

Alberta bi-Weekly crop progress

GLOBAL HOPS REPORT

Global acreage estimates show a total of 62,532 hectares worldwide for the 2022 hop crop, down slightly from 2021, likely due to the reduction of acreage in the US growing regions of Idaho and Washington.

In terms of weather, the US started the summer with unseasonably cool temperatures in June and if these conditions continue, we can expect normal crops for the Pacific Northwest. By contrast, weather conditions in Europe at the start of the growing season were exceptionally warm with low precipitation. The second half of July in particular saw extended periods of heat and drought and has the potential to result in crop losses.

Source: IGHC Market Report July 2022 

US HOP CROP OUTLOOK

2022 U.S. hop acreage is forecast at 59,896 acres, down 2% from 2021’s record 60,872 acres. Citra® and Mosaic® acreage did not grow this year, but Cascade and Centennial acreage saw growth.

Weather conditions in the US were unusually cool in June with temperatures not rising to usual levels until July. This resulted in an improved plant stand, yet it delayed the development of young plants. Downy mildew infestation also had an impact and is very pronounced in much of Washington and Oregon. However, if favorable weather conditions persist, we can expect a normal crop for the Pacific Northwest.

Sources: IGHC Market Report July 2022, USDA National Report, NASS June 2022 

GERMANY HOP CROP OUTLOOK

2021 Total Acreage: 20,620 hectares

2022 Total Acreage: 20,604 hectares

Source: IGHC Market Report July 2022 

In July, all German hop growing regions experienced exceptionally hot and dry weather. As a result, 2022 crop yields are expected to be lower than 2021. However due to the strong crop last year, this year’s weaker yield is not expected to lead to a supply shortage.

Sources: IGHC Market Report July 2022, HVG Hop News August 2022

CZECH HOP CROP OUTLOOK

2021 Total Acreage: 4971 hectares

2022 Total Acreage: 4950 hectares

Like most of Europe, July produced very unfavorable weather conditions for hop growth in the Czech Republic’s hop regions. Above average temperatures and below average precipitation negatively impacted hop development.  Flowering was relatively weak with most of the hop gardens already in the cone formation stage. Based on current conditions a smaller-than-average harvest of Saaz is likely.

Sources: IGHC Market Report July 2022, Bohemia Hop Report July 2022 

NEW ZEALAND HOP CROP REVIEW

Overall NZ Hops is reporting very high crop quality this season, with Riwaka™ and Nectaron® being standouts.

However, the total estimated harvest volume for 2022 is down by approximately 22% compared to last year, with yields for Nelson Sauvin™ and Motueka™ down significantly vs. pre-harvest estimates based on average yields. BSG recommends that brewers get their orders for these varieties in quickly and contract early to ensure access through 2023.

Source: NZ Hops https://nzhops.co.nz/blogs/news/its-a-wrap

LOGISTICS

 As we move into the second half of 2022 our industry continues to face logistical and supply challenges. The ongoing impact of COVID-19, climate change and geopolitical issues have combined to put significant strain on the global supply chain and economies.

Despite these challenges BSG remains committed to working with our customers to find solutions. As a trusted partner and ingredients supplier we want to ensure our customers have all the information they need to create outstanding products.

Logistics Update

  • Fuel surcharges are at an all-time high, with diesel fuel prices averaging $5.52 in July, vs. $2.43 one year ago. Fuel prices have a large effect on the overall price of LTL and Truckload freight. Among major LTL carriers, the average fuel surcharge increased from 34% in Q1 to 47.6% in Q2
  • Weak performance in several industries has helped flatten the growth rate of full truckload rates this summer
  • BSG has secured updated contract pricing on most outbound lanes lowering our rates to their lowest point in 12 months
  • Many shippers shifted to IMDL and rail service leading to increased rail congestion and delays.

BSG’s experienced Logistics Team continues to anticipate and minimize potential disruptions to our customer’s supply chain. By onboarding new carriers, expanding our courier service programs and contract rates, BSG’s on time delivery has trended up for 6 of the past 7 months.

Relationships in business matter – now more than ever. Because of our relationships with suppliers and high-volume distribution, BSG can provide the best shipping outcomes possible in the current market.

Ways to minimize delays and freight cost:

  • Allow extra lead time. When possible, allow for 72 hours lead time when placing an order. Building in longer lead times is the number one way you can help us keep your freight costs down!
  • Let us know your plans. Providing a forecast on major changes to your current order quantities will help us secure additional capacity in advance. Also consider increasing safety stock on your staple ingredients.
  • Anticipate extra time for special delivery requests. Plan in additional time for any special delivery requests such as liftgate, call-ahead, or straight truck delivery.

BSG would love to leverage our supply chain and logistics experience to help your business with the current challenges all sectors of industry are facing. If you have any questions regarding receiving freight, carrier selection, consistent delivery times, or similar – we are here to assist!

Please let our team know how we can best solution plan and serve you! 

Contact our Logistics team directly at BSGLogisticsGroup@bsgcraft.com.