26.10.07

IN VINO VERITAS, IN BIER IST AUCH ETWAS. But the incentive to grow corn for vehicle fuel is great.

The craft brewing industry experienced a 12 percent increase by volume in 2006, with 6.7 million barrels of beer. Sales among microbreweries, which produce less than 15,000 barrels per year, grew 16 percent in 2006.

Now the bright spot in the brewing industry is facing mounting costs on nearly every front. Fuel, aluminum and glass prices have been going up quickly over a period of several years. Barley and wheat prices have skyrocketed as more farmers plant corn to meet increasing demand for ethanol, while others plant feed crops to replace acres lost to corn.

A decade-long oversupply of hops that had forced farmers to abandon the crop is finally gone and harvests were down this year. In the United States, where one-fourth of the world's hopes [c.q.] are grown, acreage fell 30 percent between 1995 and 2006.

Australia endured its worst drought on record. Hail storms across Europe damaged crops. Extreme heat in the western United States hurt both yields and quality.

The wording of the story suggests the famous "cobweb model" doesn't quite apply to hop production. Note it takes a decade of depressed prices to induce farmers to grow something else.

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