Will Brexit Affect Hop and Grain Prices

[MyQul]

Just wondering what peoples thought's are on whether Brexit will effect Hop/Grain prices. If we dont get trade deals etc. Will this push prices up? Will home grown hops (like EKG) prices go up or will more and more beers be hopped with homegrown varieties.

Please keep this on point Gents and try to keep the discussion to the thread title. I'm sure we're all aware what has happened to previous Brexit threads. (Even now I can see Chippy polishing his big padlock over there in the corner of the Saloon bar at Moderator Mansions)

 

[ACBEV]

I was watching parliamentary committee on TV. A guy from HMRC said costs to import would rise by 5 - 7% on average for goods coming from Europe, with no cost change for other countries.

 

[ACBEV]

^^^^^ the 5-7% is assuming nothing else changes.

 

[-Bezza-]

Really hard to second-guess as there are too many variables. Economics would probably be thus:

Import & Export duties
- The imposition of duties would drive up the costs of imports
- As the same duties will not apply to domestic products, UK hops and grain would be comparatively cheaper
- However, for a fixed supply, the increase in demand will also lead to price increases for domestic goods
- Supply will increase over time, leading to a return to something normal
- If however we also have export duties, UK products will be more expensive to our European friends and so demand will decrease in the continent. In this case, prices of domestic products would drop.

Currency
- If the £ weakens, the costs of imports will increase. Domestic demand will increase, as above.
- If the £ strengthens, the cost of imports will decrease and so domestic products will be comparatively more expensive. However, for a fixed supply there will be over-production which will lead a decrease in price for those domestic products in the short-term. Supply would be expected to decrease over time as farmers move to other more lucrative products.

Other factors such as underlying costs of production (wages and availability of workers, transportation costs and fuel prices, energy costs etc) would all have an influence too.

 

[Leon103]

I would say a minimal increase, like we saw when it was announced.

 

[lancon]

already has due to fall of the pound...

 

[Ajhutch]

I agree with what @Bezza said on the economic points.

They’re both agricultural products, the biggest factor impacting on prices is surely going to be the success or otherwise of the harvest. If there’s a lousy hop harvest in the US this year then prices for Citra/Mosaic etc will go up right after Brexit happens but it won’t have anything to do with Brexit.

 

[simon12]

As well as what bezza said about possible currency fluctuation, European hops will either have duty put on them and go up or not and stay the same. English hops if Europe puts duty on them enough to lower demand they could go down or will stay the same, rest of world hops (I have no idea if theirs duty on them) we will likely have the same deal so the same or we could make a better deal making them go down. What ever happens I think how good harvests are and general supply and demand will make more difference than brexit. Nearly forgot this all applies to grain as well as hops. Just thought the EU has all types of subsidies for farmers so forget the above it could make a huge difference and I have no idea how it could change or how current subsidies work.

 

[dad_of_jon]

more worrying i think is the potential trade war, eu have targeted harley davidsons & american whisky, if the eu slapped a tariff on hops then leaving eu may lead to a reduction in the prices of those patented and only available from the us. Assuming the UK makes its own deal with USA.

 

[marshbrewer]

Don't for get guys import taxes are set by our government; WTO rules set a maximum that these can be, not a minimum. So even under no deal, stuff from the EU could be subject to duties in the range of zero - WTO maximum, and anywhere in between, but it would be up to the UK government.

Exports, on the other hand, would be the other way round (at least to the EU).

However, crop harvests and currency fluctuations will be the biggest factors IMHO.

 

[Hoppy]

Brexit has already made a difference with our currency. as Iancon says and Bezza sums it up nicely. All a bit in the air at the moment, depending on what deals, if any are struck.
AJ Hutch is correct about harvest & prices, but is looking good for the US this year (currently subject to 5.8% import duty on goods and shipping). Reservoirs are full (US hops are irrigated), UK OK at the moment, but do need water soon.......

 

[Hoppy]

As to malt, we export more than we import, therefore the domestic market shouldn't really be affected. We ship speciality malts like Maris Otter to the US, i cant see why the status quo should change there.
The current weather not Brexit, (I recently had a chat with a few grain merchants), is more an issue for (barley) malt, as hops' root systems go much lower into the ground to find moisture. Migrant labour doesn't affect grain, as there is much less labour involved, due to automation, combines in the field and a couple of trailers transporting grain to stores.