Blame It On The Grain

If you're currently blaming biofuels for the rise in food prices there's good news and bad news. First the good news. You're right. The bad news is you're mostly wrong. Over at the NY Times Roger Cohen points to the major culprits involved in higher food prices...

Hundreds of millions of people have moved from poverty into the global economy over the past decade in Asia. They’re eating twice a day, instead of once, and propelling rapid urbanization. Their demand for food staples and once unthinkable luxuries like meat is pushing up prices.

At the same time, the rising price of commodities over the past year has largely tracked the declining parity of the beleaguered dollar. Rice prices have shot up in dollar terms, far less against the euro. Countries like China are offloading depreciating dollar reserves to hoard stores of value like commodities.

Food price increases are also tied to oil being nearly $120 a barrel. Fossil fuels are an important input in everything from fertilizer to diesel for tractors.

Over at The Glittering Eye Dave Schuler comes to a similar conclusion:

Factors in rising food prices include:

• Increased demand.
• Rising oil prices (the cost of oil accounts for something like 25% of the cost of grain production).
• Bad government policies.
• Speculation.
• Use of food crops for fuel production.

probably in about that order.

He, like me, is also of the opinion that diverting food to be processed into biofuel is a bad idea. We should be using marginal lands for farming grasses to convert to biofuel, converting agricultural waste to biofuel, and farming algae. The problem is that our subsidization of current biofuels is distorting the market demand for investment in these areas in addition to contributing to higher food prices. Unfortunately since these subsidies are helping prop up many American farmers the reality is that it would currently be political suicide for any member of the House or Senate to take up arms against them. And until food prices become high enough that subsidizing ethanol becomes impractical (as its one of the few things on Mr Schuler's list we can actually control), a large enough breakthrough in the biofuel sources I've mentioned occurs therefore rendering subsidies irrelevant, or there is a major public outcry we're stuck with them.

Of course if the price of beer keeps going up the latter may happen sooner than either of the former.

H/T to The Daily Show for the title

The Coming Carbonated Crisis

From the Denver Post:

Shortages may put head on beer prices

SUNNYSIDE, WASH. — Fans of Snipes Mountain Brewery's cloudy Hefeweizen relish the subtle wheat flavor of the bright, summery brew, and like beer drinkers everywhere, they know when their favorite brew tastes a little too hoppy or bitter.

Connoisseurs could be in for a surprise this year, and they may not be alone.

Small brewers from Australia to Oregon face the daunting prospect of tweaking their recipes or experimenting less with new brews thanks to a worldwide shortage of one key beer ingredient and rising prices for others.

Oh, and one other thing: Beer prices are likely to climb. Craft brewers don't have the means to hedge against rising prices, like their industrial rivals.

"I'm guessing, at a minimum, at least a 10 percent jump in beer prices for the average consumer before the end of the year," said Terry Butler, brewmaster at central Washington's Snipes Mountain.

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.

CNN's Headline News reported today that micro brewed beers could hit ten dollars a six pack. Even as I speak Texas' beloved Shiner beers are steadily marching steadily towards eight dollars a six pack. This price increase is part of the larger trend that includes higher dairy and beef prices that was caused by the subsidization of corn to create more ethanol to help us achieve energy independence.

So what's a fella to do? Either eat the price increases and consider it your contribution to energy independence , lobby your lawmakers to promote waste based ethanol research, or do some homework on brewing your own beer.

Given the current bulk grain prices at the store this could spur on a new trend of home brewing.

Beer Good

Beer goggles bad...

From CNN:

BELGRADE, Serbia (Reuters) -- A 23-year old Serb was found dead and half-eaten in the bear cage of Belgrade Zoo at the weekend during the annual beer festival.

The man was found naked, with his clothes lying intact inside the cage. Two adult bears, Masha and Misha, had dragged the body to their feeding corner and reacted angrily when keepers tried to recover it.

"There's a good chance he was drunk or drugged. Only an idiot would jump into the bear cage," zoo director Vuk Bojovic told Reuters.

Local media reported that police found several mobile phones inside the cage, as well as bricks, stones and beer cans

Beer Myths Exposed

The following is a public service announcement:

We now rejoin our blog already in progress.