The obvious solution to the yarn shortage problem is to use my own handspun yarn. I will have to price that accordingly....but if I include a little card explaining the source of the wool, process to make it (lots of TLC and personal touch, yada yada), etc, then I might be able to command a higher price for them. I will continue making the cotton hats as well and charging only $20 for those.
The beauty of it is that I can carry the yarn and crochet hooks along with me and work on it whenever, as opposed to some of the other things I've tried to make and sell. Success!