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Hops a-Hoppin’: Craft Breweries Could Struggle as Costs Rise

Savor that microbrew beer while you can this Fourth of July. Craft breweries are in a fight to survive as the price of hops is hoppin'. Hop flowers are added to beer to give it a more bitter flavor and the popularity of hopped-up beers has led to a serious shortage. The average price has risen to $3.59 a pound from $1.88 in 2004, according to the Hop Growers of America. Some growers even predict $10 a pound by the end of 2014. This spells trouble for smaller brewers, who produce fewer than 15,000 barrels a year. Some hop farmers are contracting with larger breweries to lock-in prices and others are cutting out the middleman and selling direct to the beer makers. For now, most brewers are not passing along the higher costs, because the craft brew industry is so competitive nobody wants to raise prices. But that could change soon if hop prices keep a-hoppin'.

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Beer war brewing? 2:10

IN DEPTH

-- Jane Wells, CNBC