May 2008

Sake Bummer - RICE PANIC '08

Posted by admin in 2008, May, Newsletter, Sake Bummer

sake bummer may 2008I am not oblivious. I am not unaware of current events on the whole. And I am not one for panic. So when one plus one plus one started jumping up and down in front of my face I had to do some real time adding it up.

If you have just walked out of your cave then take note - there is a global rice panic! I won't go into my diatribe about how modern news cycles create such panics routinely nor will I speak to the perceived reasons of said panic, but I will say ohm shanti shanti ( I don't know what this means, but my four year-old daughter mutters it when she needs to relax - learned it from her yoga instructor).

On April 28th I called one of my sake distributors to order some brews for the store. The gentleman who works for this mostly food distributing company, said Beau there is a "rice emergency." He thought that since I sold a rice-based beverage then I would be interested to know that their consumption rice prices are 50% higher at the moment and in June will shoot up 100%. He said something about farmers growing more corn - farmers not exporting from certain Asian countries - bad crops in Japan. He finished by saying that this problem will get worse next year.

So after renting a U-Haul van and buying 10,000 pounds of rice from Costco I got to thinking - what about gluttonous rice? We all know that sake brewing rice is not made for consumption - you can eat it but it's not very nice at all. Is there a brewing rice shortage? Is there a brewing rice panic? Will this represent the old days of the war-torn sake history when Japan placed a ban on making sake, so that Japanese soldiers all over the globe could eat rice? During this dark period of time alcohol became the norm to stretch out batches of sake - even to the point of not using rice at all to make a synthetic sake. Are we there? Should you good people start to panic - should you start panic buying as much sake as possible? The answer is YES. Buy as much sake as possible. Email us your credit card numbers. Quickly! Buy like mad.

Ohm Shanti Shanti - say it with me people! The answer is no. There is no sake panic! No sake brewing rice panic. Not yet at least. When I was in Kyoto last fall nine out of ten of my brewers said that their rice harvests were superb this year (one reason is that they had very few typhoons). One of my brewers in Nagano said that they had a very hot summer and this suppressed quality and yield. But on the whole folks were happy! This rice crop has been and is currently being brewed and stored and I still have not heard more than one brewer say anything about a shortage. So we are not in a crisis mode! Nevertheless as I watch the news cycle religiously and base my life thoughts upon what cable news anchors tell me - I have decided to raise the price of sakes at True Sake by 50% then by 100% in June. YES!

That is a joke, but what lays ahead for us may not be that funny. Typically sake brewing rice is more expensive than average consumption rice. One could argue that it is easier to grow consumption rice on the whole (most brewing rice is quite tall and susceptible to high winds), so it is not out of the realm of crazy to think that many farmers will switch to making consumption rice next season. This is especially true if the current pricing scale continues in such a fashion. People do not need to drink sake. People need to eat. Will this shortage play itself out? Will calm be restored? Basically I predict that most exporters/importers will use this panic to factor in the real devastating animal in this dogfight - the elevated fuel costs that filter all the way down to small breweries in so many capacities. So when you see "rice panic" for now think "fuel panic" because you will be paying higher prices for sake for this reason. We could have a slew of farmers change crops next year in Japan. This may impair next year's sake, but more immediately expect the pain to come from the weak buck and the high pump prices. As one major importer told me, "We have held our prices constant for as long as we can - it's now out of our hands - the weak dollar and the cost of gas must be reflected in the price of our sakes."

Now that is something to panic about!

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