The Price of Beer

While Mrs. Ares and I were on our illustrious journey out west we toured a few breweries. It’s just something we do on vacation to pass the time and sample the local brew. (On a side note, by and large they’ve got it going on out west when it comes to beer. In some small towns we visited the locals don’t even buy beer at stores. They take a gallon jug to the brewery every few days and have it filled. Like going to the dairy for your milk. Why can’t we do that here in the south? That’s another day’s post.) One of the breweries we visited was Butte Creek Brewing Company in Chico, California. Something the tour guide said caught my attention. As we were in the grain area of the brewery she said the price of grain was rising sharply, which was going to result in beer becoming more expensive and probably some smaller breweries going under. My amateur observation and this article confirmed her statement.

Why is this happening, you ask? Really it comes down to one word: Ethanol. In our inane attempt to achieve “energy independence” we’ve started converting cropland into fuel. With greater subsidies available, farmers (read: Archer Daniels Midland and Cargill) are planting more corn and less of everything else. Those of us who passed high school economics know that when there is less of something the price goes up. Another way this is playing itself out is a rise in soy prices, which is a result of switching cropland to corn. This is going to manifest in a lot of areas because soy is used in so many products. Earlier this year Mexico was rocked by a jump in the price of corn. Reason for the jump: More corn going to Ethanol production.

As for Ethanol itself, I have a few issues. By every account I’ve read there is a net energy loss in production. In other words, it takes more energy to make a gallon of Ethanol than the energy you get from that gallon. While on vacation I read The Worst Hard Time, which is about the Dust Bowl. (Excellent read, by the way.) One of the major contributing factors was that during World War I the government guaranteed a price of $2 a bushel for grain, which was drastically high. This caused a huge increase in breaking new land for grain production, which accelerated topsoil loss. Anybody here think ADM or Cargill is going to be all that concerned about crop rotation and conservation? Finally, there is a basic and fundamental premise to our survival as a species: You don’t mess with the food. This feels like we’ve started down a bad path. Unfortunately there are large amounts of money and emotional political issues tied to this, so it will probably take longer than usual to see it for what it is. On a personal level, they lost me when they started messing with the beer.

Ares