Common Tragedies

Thoughts on Environmental Economics

My grocery budget is about to double

Posted by Daniel Hall on October 19, 2007

The worst knock-on effect I’ve heard of yet from subsidies for biofuels like corn ethanol:

That six pack of high-brow beer is about to come at a higher price, thanks to the sharpest surge in decades in the cost of the hops and barley that give each brew its distinctive taste.

Consumers could pay 50 cents to $1 per six pack more in the coming months for many small-batch “craft beers,” as brewers pass on rising hops and barley costs from an unpalatable brew of poor harvests, the weak dollar and farmers’ shift to more profitable crops. Other makers of craft beers, the fastest-growing segment of the U.S. brewing industry, say they may eat the higher ingredient costs, which will pare their profits. …

Craft beer makers have faced escalating costs over the past year. Prices for malting barley, which accounts for a beer’s color and sweetness, have jumped as farmers increasingly shifted to planting corn, which has been bringing higher prices because of high demand from makers of biofuels, like ethanol.

H/T: John Whitehead.

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One Response to “My grocery budget is about to double”

  1. Evan Herrnstadt said

    We drink PBR anyway. Net gain for Iowans!

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