Bourbon Feels the Burn of a Barrel Shortage

I love bourbon.

At WSJ, "Surge in popularity coincided with downturn in white oak logging":

In 50 years of making bourbon barrels, no one had ever offered Leroy McGinnis more than what he charged for them. But over the past six months, multiple distillers have offered to pay him $250 a barrel—a 70% premium above the $150 list price.

The offer illustrates just how scarce bourbon barrels have become. As bourbon sales have soared, both barrel production and the lumber industry have struggled to keep up.

Mr. McGinnis’s Missouri-based company, McGinnis Wood Products Inc., gets about four email requests a day for barrels. He turns most down. Like many of his competitors, he has only enough capacity and wood to fill orders from longtime customers. The rest go on a waiting list, perpetuating a bourbon barrel shortage now entering its third year.

“There’s never been nothing like there is today, and I don’t see it letting up,” said Mr. McGinnis, whose Cuba, Mo., company will sell 150,000 bourbon barrels this year.

The shortage reflects a supply-chain conundrum. Upstream, barrel makers face a wave of demand because a half dozen established bourbon distilleries and 300 new, craft distilleries are increasing production amid a bourbon boom. Downstream, they face a shortage of white oak wood used in barrels because the lumber industry hasn’t rebounded from the housing market’s collapse...

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