Is Fuel Consumption Increasing the Cost of Beer?

Beer FuelThe other day I blogged here about Dubya’s half-hearted initiative to reduce projected gasoline consumption. Then two readers, Liz and and Joshua drew my attention to an article in the Financial Times about how demand for land to grow feedstocks for biofuels may be driving up the price of malted barley, and hence could impact the price of beer.

According to the article:

Jean-François van Boxmeer, chief executive of Heineken the Dutch brewer, warned last week that the expansion of the biofuel sector was beginning to cause a “structural shift” in European and US agricultural markets.

One consequence, he said, could be a long-term shift upwards in the price of beer. Barley and hops account for about 7-8 per cent of brewing costs.

. . . barley production in America fell to 180.05m bushels in 2006, the lowest level since 1936. The value of the crop was the lowest since 1970 – at $498m.

. . . This decline is partly due to the fall in the land area used for growing barley, which dropped to about 2.95m acres – the lowest since records began in 1866.

. . . Global demand for barley has risen 2 per cent to an estimated 145.5m tonnes this year, the fourth year in the last five in which demand has exceeded supply.

. . . “In the US, land that was cultivated for growing barley has been given over to corn because of the ethanol demand,” said Levin Flake, a grains trade analyst at the US department of agriculture.

As a society, do we really value transportation fuel more than beer or
are we behaving irrationally? Will we correct our behavior once we realize the price of beer is at stake, or do we really prefer having SUVs over having affordable beer?

A further complication in this is that beer itself is fuel, as demonstrated visually by the image above from “randymar” on the Cool Running discussion forum.

The bottom line for beer drinkers:

  1. Help keep beer prices low by reducing your fuel consumption, thus lowering fuel demand and limiting the need for fuel in the first place.
  2. Support cellulosic ethanol, a biofuel that can be made from ag waste (stuff we already have plenty of) instead of ethanol made from crops dedicated to fuel production, like corn (currently the source of nearly all ethanol in the U.S.)

One Response to Is Fuel Consumption Increasing the Cost of Beer?

  1. Dave Bonta says:

    3. Bring back the f***ing trains!

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