More Ethanol, Less Beer

Saturday, March 29, 2008
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For several months there have been stories circulating about the shortage of hops and barley. Thanks to the government’s policy bias toward corn-based ethanol (an industry built upon federal subsidies), farmers are planting corn instead of hops or barley. This mostly affects craft beer makers because they can’t absorb the higher costs like the bigger boys, and because they rely on hop varieties for the distinct taste of their beers. Changing the hop can significantly alter a beer’s character. Brewers are struggling to meet the higher production costs and/or experiment with new hop varieties.

“The malt is available — the problem is the price,” he said. Barley prices are at all-time highs because of the short supply, he said.

Because ethanol is such a hot commodity today, “farmers are saying ‘Screw the malt; we’ll just grow corn,’ ” said Hopunion’s Olson.

At the same time supplies of hops and malt are low, demand is at a record high. Imported and craft beers now account for 17 percent of beer consumed in the U.S., up from less than 1 percent in 1978, said Pike Brewing’s Finkel.

The explosion of craft brewing has been a wonderful event for the beer consumer. Although craft beer market share is still rather diminutive, the diversity of products this industry offers is truly amazing. I walk into the local, specialty liquor stores where I am greeted by no less than 3 aisles of brew – where the size, shape, color, and varieties offered are seemingly endless. Just as wonderful are the great displays that retailers set up within their craft beer sections. With so many choices and opportunities for trying new beers, the standard domestics and imports no longer occupy shelf space in my refrigerator.

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