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Price of hops reaches highest levels since 2008

GRAND RAPIDS, Mich. (NEWSCHANNEL 3) - The craft beer craze is sweeping the nation, and West Michigan has become a hotbed for microbreweries.

But high demand is driving up prices for one of the main ingredients, and the consequence could be tough to swallow for craft beer lovers.

Hops prices across the country are the highest they've been since a drought-damaged crop in 2008.

Right now, brewers say they're paying roughly $7 to $14 per pound for Michigan-grown hops.

But the growing value of hops is helping a fledgling industry grow stronger in Michigan.

"Hops basically are the life blood of what we do," said brewer Robert Wanhatalo.

You may have noticed there are lot more people who look like Wanhatalo these days.

"I have not seen my face the entire time I've been a professional brewer," Wanhatalo said.

And they all need their life blood.

"It's the growth in craft brewing," Wanhatalo said. "With that, obviously comes the desire and the need to get more hops."

That is where people like Howard Haselhuhn and farms like Black Creek Hops come in.

"Presently, we have two, we're expanding our third acre," Haselhuhn said.

It's a far cry from the thousand acre fields in the pacific northwest but it's not bad for Michigan.

"It's funny, cause just a few years ago I was the third largest hop farmer in Michigan," Haselhuhn said.

Since then, demand has continued to grow more hop farmers.

"We're getting calls all the time from new breweries and from breweries that want to try some local hops," Haselhuhn said.

That demand has doubled hops prices across the country in the last 5 years and the craft brewing craze is gaining strength.

"That kind of scares me," Wanhatalo laughed.

But it's good news for the entry level hop farmer.

"I'm starting a hops farm, I'm not making a profit yet," Haselhuhn said with a laugh.

If demand makes prices double again, that could change things in a hurry.

"It would definitely pay back the bank account for everything we've invested a lot sooner," Haselhuhn said.

But it will come at a price for the hopped up craft beer enthusiast.

"I think we'll pay whatever it takes to keep those beers around but we may have to charge a little bit more for it," Haselhuhn said.