Price Restrictions?

Every now and then, we hear from a user who thinks The Lupulin Exchange should impose price restrictions. A few have even gone so far as to suggest that we are enabling sellers to unload highly demanded varieties for a profit. Both suggestions are equally absurd.

The Lupulin Exchange does not set prices and never will. We did not create the secondary spot hop market - it existed (as a free market) prior to inception of The Lupulin Exchange. Previously, buyers and sellers connected via other venues (BA Forum, Probrewer, word of mouth, etc.) and they did so without any price regulation. If you think sellers weren't profiting from surplus positions of Citra, Mosaic, etc. the old way, then you weren't paying attention to offer details. We simply created a centralized marketplace - a venue that was badly needed to improve transparency, market allocations (a major contributing factor to the hop crisis of 2008-9), and convenience, while providing a means for secure transactions.

Are some sellers on The Exchange offering hops at (fair?) market prices substantially higher than they paid? Yes. Is anyone forcing buyers to purchase overpriced hops? No. Remember when spot Cascade was $33/lb from reputable brokers only 6 years ago? Are some sellers offering hops at prices below contract because they are about to incur storage fees and/or have cashflow problems? Absolutely. Notice which varieties have the biggest spread in sale prices over the last 11 months, but pay special attention to weighted average trading price.
Sure, there are a handful of buyers willing to purchase relatively small quantities of Simcoe, Amarillo, Citra, and Mosaic for >$25/pound, but the weighted average sales price for these varieties suggests a far lower fair market value. If somebody dropped 10,000 lbs of Citra on The Exchange tomorrow at $30/lb, the vast majority of it would probably sit there and rot. Is it a good idea to intentionally over-contract popular varieties with the intention of selling them at a profit? No. Here's why you might get burned.

We aren't going to pretend to know what you paid for a given box of hops and we definitely aren't going to tell you what you can/can't sell it for. If you didn't notice our tag line, The Lupulin Exchange is a free market. If you think a socialist hop exchange would make the world a better place, go ahead and start one - there are some catchy domains still available.

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