Filed under: Ethanol, Green Daily, Holidash
A Christmas with pricier beer? Blame ethanol
Is the ethanol lobby prepared to be the grinch of Christmas present? According to a recent article in The Economist, growing more profitable corn (for the ethanol market ) turned many Pacific Northwest farmers away from hops and barley and onto corn. Therefore, small beer brewers are having a hard time finding enough hops to make their beer. This in turn, is making some beers more expensive or simply not available. A Santa without beer? Tragedy. According to the article, hop prices for at least one small brewer jumped up to five times as expensive as before. While larger beermakers have long-term contracts that have sheltered them thus far, The Economist writes that, "Without their supply of hops, some smaller producers are going out of business, bringing to a halt the fastest-growing segment of the industry. Other craft brewers and brewpubs are experimenting with new recipes, hoping their customers will adapt."
The shift away from beer crops is not the only thing that threatens small breweries at the present time, but who knew that filing the tank with ethanol could have such wide-ranging effects? Merry Christmas!
[Source: The Economist via TTAC]
Reader Comments (Page 1 of 1)
TX CHL Instructor 1:27PM (12/25/2007)
I'm not exactly crying in my beer... such is economics. Unfortunately for the folks diving into the corn business expecting to get rich on the ethanol bandwagon, they are eventually going to learn (the hard way) that Political Correctness makes lousy economics.
Ethanol is a mediocre fuel, and corn is a suboptimal feedstock for it, and no amount of wishful thinking or Political Correctness can change that.
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Domenick 5:29PM (12/25/2007)
I don't know about the "politically correct" but I suspect anybody with a small degree of environmental awareness might have suspected supplementing gasoline with hundreds of thousands of acres of monocultured corn would not be a great idea.
Great business for Monsanto and Cargill et al maybe...
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Mort 7:30PM (12/25/2007)
It's all fun and games until somebody loses an eye.
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gsolman6 11:04PM (12/25/2007)
It is not "political correctness" but rather "big ag lobbyist" that are to blame. This situation stands to get worse and affect many other consumables as ethanol production goes up. I just hope the American public realize that 1) ethanol gets you less mpg and 2) that there are unintended consequences, economic and environmental, that will have to be contended with
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kballs 12:19AM (12/26/2007)
You'd think some hops growers would dive back into the market which now pays them a lot more for their crop... thus dampening any effects of ethanol.
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cowboy bob 9:01AM (12/26/2007)
All of you are quite correct. Unfortunantly the politicians pander to the public, which for the most part are dumber than a box of rocks. This is how millions of dollars are wasted, politicians get re-elected, and everybody with the national average intelligence,(IQ 98)feels good. God help us.
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bill 11:48AM (12/26/2007)
This is what is known in the real world as unexpected consequences. Somehow I am having difficulty getting my head around the concept of using a food source to create a fuel source that is amazingly less efficient than the fuel it is replacing. If the U.S. Congress really wanted to screw up the energy and agricultural situations what would they be doing that they are not doing now?
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tbyron 12:34PM (12/26/2007)
This is oversimplified and lazy reporting. Clearly, demand for ethanol has increased demand somewhat for corn. HOWEVER, there are other factors at work that are playing at least as large if not greater role in these costs. As Asian countries like China, India, Malaysia and Indonesia continue to grow, huge populations of formerly impoverished people are moving up economically. The first thing many of these families do is improve their diets, with protein, as in meat. That increased demand for meat has driven a corresponding increase in demand for feeds, as in grains.
Additionally, China has a growing problem with the availability of fresh water. To mitigate these problems, they have once again become a net importer of grains, led by huge purchases of soybeans from Brazil. To them, essentially this is also a way of importing water. But, the net effect is the same, more demand.
Take a look at all commodities and look at them globally. There is something far larger than changes in the US transportation fuels picture at work here.
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Mike 1:29PM (12/26/2007)
And meanwhile my homebrewery sits idle...this is not good.
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Nathan 5:33PM (12/26/2007)
Let's run some numbers. A gallon of beer contains about one pound of barley (http://www.ag.ndsu.nodak.edu/aginfo/barleypath/barley&beer.html). With a 48-pound bushel of barley selling for around $4, that means that a gallon of beer (about a 12-pack) has less than ten cents of barley in it. So if barley doubles (which no one is predicting) the cost of your $10 12-pack will go to $10.10. I don't know about you, but I'm still looking forward to New Year's Eve.
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Wildgoosechase 9:12PM (12/26/2007)
While a shortage of hops and other crops may exist today, the market still exists. In the long run if there is a market, it will be produced. Farmlands that have been fallow may once again be brought in to production, preventing sprawl.
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Duane 6:49PM (12/29/2007)
This is a typical bogus story slanted to blame ethanol. Actually the 2006 hops crop was down due to drought, not ethanol production.
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