Last month, I had a chance to share a few insights from LExIndex during the Master Brewers District Northwest meeting. Here’s a follow-up, now that we’ve got another month of data.
The chart above compares Cascade T90s CY23 vs CY24. CY24 has been trading at a premium of >$3/lb for most of the last 14 months, with far less available inventory. Let’s look at some more crop years:
Notice how the mix has shifted. If you scroll back to earlier parts of the down-cycle in LExIndex, you’ll see stretches where the spot market is juggling meaningful volumes from three or even four Cascade crop years at once. In the last 12–14 months shown here, most of the Cascade T90 inventory on LEx has been CY23, with CY24/25 building behind it and older crops showing up as much smaller bars. That shift toward a more concentrated crop mix is exactly what you’d expect to see before price decay starts to flatten out.
But let’s say that you’re an over-contracted brewer or an over-planted grower…how can you judge the urgency of getting out of your position? Take a look at the historical price decay curves:
- CY22 shows a much steeper, faster decay than CY21 – roughly the same starting price, but it trades down into the mid-$5s in about the time CY21 took to drift $1.
- CY23 is worse: it falls under $5/lb in about a year as the market digests back-to-back surplus crops.
- CY24 is the first crop in several years that hasn’t fallen off a cliff – so far it’s only about a $1 discount one year post-harvest, despite all the down-cycle scars.
- All five crops enter the market at roughly the same level (~$8.50), so the real story isn’t where Cascade starts, it’s how fast it slides.
If you’re long Cascade, the takeaway isn’t Cascade is $X today, it’s which curve you’re sitting on. Extra CY22/23 looks a lot more like a wasting asset – the historical curves in LExIndex say you’re racing other sellers downhill. Extra CY24 is closer to a normal year: there’s still a window to lighten up without the kind of panic discounts we saw in 2022–23.
This is, of course, just one hop variety. Has LExIndex helped you discover any interesting trends in other varieties?