06 July 2007

The link between beer prices and ethanol production

Sounds like a strange correlation doesn't it? According to USA Today, retail prices for beer jumped 3% in May, the biggest increase in two-and-a-half years. Why? Because farmers are growing less barley--a main ingredient in beer--in favor of growing corn, which has become a more lucrative crop due to its high demand for use in fuel ethanol production. As a result, barley has become more expensive.

While this might seem like bad news, it's not so bad for those of us who enjoy microbrews, which haven't been hit as hard by the higher prices for barley because the growing popularity of microbrews has generated increased sales to offset the price hikes for barley. As a result, microbreweries have not had to raise their prices by much.

So, keep on drinking!

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