Will More Fuel Efficient Cars Lead To Cheaper Beer?

Gas guzzlers don’t just spew more carbon into the air, they apparently affect the price of a cold, frosty brew:

Heineken CEO Jean-Fran

ois van Boxmeer pointed out on Wednesday that the increasing demand for grain for biofuel will put pressure on the price of grain, and by extension on malt and hop prices as well, two important raw materials.

We’re assuming he means that ethanol production is to blame for the spike in grain prices. (Corn is at a 10-year high today.)

But something seems fishy here. Beer — at least good beer — is made from barley, and we’ve never heard of barley being distilled into fuel additives. We have heard of wine being distilled into ethanol, which just seems so, so wrong… Corn remains the fuel crop of choice.

And why would the price of hops go up because of “biofuels”? Hops can’t be converted into fuel at all.

Sounds to us like Heineken is just looking for an excuse to jack up prices.
MARK ASHLEY

Cleaner fuel, dearer beer? [Expatica]
(Photo)

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  1. Pelagius says:

    That is nonsense. Hops come from a vine and are cultivated seperately from the grain used in brewing. If we decide to accept the argument that “diverting” corn into biofuel will jack up the price of corn, then the result may instead be that brewers return to using only barley malt (the way god intended) for their beer, rather than doing it on the cheap with corn and rice sugars.

  2. heinzs says:

    It can cause ripple effects in places where both barley AND corn are used. For example, people feeding their cattle might use more barley as a result of higher prices for corn feed. Considering that the primary use of corn is currently in livestock feed, it’s not that outrageous.

  3. SpecialK says:

    Or, just on a whim here, perhaps more land will be used to cultivate corn, therefore putting a squeeze on the other guys.

  4. mikesfree says:

    @SpecialK:

    Bingo I think

  5. John says:

    @SpecialK:

    Farm prices in the US Midwest have gone up for the first time since the 80′s, due to increased demand for corn for ethanol. I sincerely hope this is a trend that continues. Anyone that can grow corn is creating raw materials for fuels. US, Africa, Russia, Asia could all just grow their fuels they need to power their economies…this could really get interesting.

  6. John says:

    Oh, and by the way, I prefer wheat beer!

  7. leftistcoast says:

    A bit off topic but corn is a really really poor choice for ethanol production. Until recently, all studies have shown a net energy lose from converting corn to ethanol and the numbers in the recent report from the Fed showing a slight net gain have been heavily criticized. Beyond that, corn is one of the most erosive and petro-product dependent crops grown in the US. Sugarcane is a much better choice for producing ethanol but, again, the amount of land required to grow sufficient crops to significantly displace gasoline would be untenable. As for it’s impact on beer, considering how much rice and other grains go into most crappy American lagers, it might have an impact. But not on the good beers…

  8. Kornkob says:

    @Pelagius said “then the result may instead be that brewers return to using only barley malt (the way god intended) for their beer, rather than doing it on the cheap with corn and rice sugars.”

    I beleive that is exactly the source of this assumption. If the price of corn climbs because of scarity caused by increased ethanol production brewers may find themselves using more expensive materials/processes (for example: using barley instead of corn sugar additives).

    Having brewed beer, I can say that corn sugar can be used in a variety of ways that dont’ compromise flavor. For instance, (and I doubt Hienekin is doing this) corn sugars are frequently used by people who ‘naturally’ carbonate their beers (In other words, they bottle their finished beer with a small amount of corn sugar and let the yeasts create the carbonation). Also, corn sugar often finds itself added to the kettle in order to raise the alcohol content while having little impact on the flavor (I do this with the occasional light ale recipe when I want the beer to have more ‘kick’ but not change the other flavors with the addition of more malt).

  9. ehawk says:

    You also have to remember that macro beers do actually use a decent amount of adjunct grains in addition to barley, namely corn and rice. that, compounded with competition for a good price point for feed grains does actually put some pressure on the beer industry, though i’d venture that the craft brewing folks are going to have an easier time of it than the macros.

  10. crackalacker says:

    Coors has an ethanol plant at their brewery, all the old hops and “excess beer”

  11. “And why would the price of hops go up because of “biofuels”? Hops can’t be converted into fuel at all.”

    Where I live farmers grow two large-scale crops: corn and soybeans. What happens is that when the price of corn skyrockets (due to alternative fuel subsidies and whatnot), more farmers convert acreage to corn to take advantage of the better prices, which in turn creates a shortage of soybeans because fewer acres are devoted to soybeans, and that raises the prices of soybeans.

    That’s the theory behind why ethanol and biofuels could raises the prices of a wide variety of crops GROWN ON SIMILAR LAND that have nothing to do with biofuels. Cranberries, which are grown in bogs, and blueberries, which require very acid soil, are not going to be displaced for corn acreage. But barley and hops might be, as land that grows barley and hops is at least marginally suitable (and frequently entirely suitable) for corn.

  12. SexCpotatoes says:

    mmmm, making me thirsty… but Heineken tastes like a fucking ashtray, give me Yuengling Black and Tan any day of the week.

  13. mad_oak says:

    Ummmmm….. If corn is suddenly going to go gangbusters…. I humbly suggest it is time to scrap all these damn farm subsidies and let ‘em grow corn!!! At least put a cap on the annual payments allowed!!!! Corporations frickin BUY FARMLAND WITH NO INTENTION OF FARMING JUST TO GET PAID FARM SUBSIDIES!!!

  14. kcskater says:

    two words: cellulosic ethanol

  15. coraspartan says:

    For an inside look at all the ways corn is used in our society, both in food, beer, and livestock feed, check out the book, “The Omnivore’s Dilemma” by Michael Pollan. Before reading this book, I had no idea of the huge role corn plays in our society. Fascinating.

  16. @mad_oak:

    “If corn is suddenly going to go gangbusters…. I humbly suggest it is time to scrap all these damn farm subsidies and let ‘em grow corn!!!”

    While I wholeheartedly agree that the farm subsidy system is perhaps the most f’ed up program in our entire government and desperately in need of reform, sudden removal would probably put our entire national food supply into chaos as various sectors of farming collapsed entirely.

    Not that farmers can’t grow crop X without subsidies (the Amish do it, and make far more per acre than farmers taking subsidies), but the system is so entrenched and the incentives so perverse that removal of subsidies would bankrupt many small farmers and yes, even throw the corporate operations (like CAFOs that produce actual food, not Monsanto or whatever. Although it would fuck with Monsanto’s bottom line, which I’m always in favor of.) into total disarray.

    If you’ve got a farmer making payments on a $220,000 combine (I’m told that’s what they cost) because you’re growing crops under the system that the US pays subsidies for you to grow (i.e., acres and acres and acres and acres of #2 corn) and those subsidies disappear suddenly, you are SCREWED. Combines are primarily useful in large monoculture situations, which is convenient for corporations and the US government getting food most efficiently from farmers, but monoculture farming is only marginally profitable. That’s part of why we subsidize — “we” as the government and the corporations are willing to pay in subsidies for the convenience of monoculture. Remove those subsidies, monoculture is no longer profitable, and your combine is totally useless if you switch to a different type of farming — and since everybody else is jumping ship to get away from monocultures, the market is glutted with used, useless combines.

    (And there are probably a lot of farmers who have never farmed outside the subsidized monoculture system and wouldn’t actually know HOW to do it.)

  17. Pelagius says:

    I agree that for various reasons cited above barley prices could increase (also, Australia is a major supplier of barley and has been suffering disastrous crops), but the hops comment is ridiculous. The terrain used for hop cultivation varies considerably from corn or other grasses, generally being cooler, hilly areas.

    Anyway, one more reason to brew your own!

  18. abz_zeus says:

    Wine that’s converted in to ethanol, is the stuff you really wouldn’t want to drink. Here in the EU (or EEC) we have the wine lake, butter mountain grain mountain etc so at least to reduce the wine lake they rip the ethanol out of it!

  19. Elvisisdead says:

    It’s not that simple of an argument. There’s not just “a corn market”. Just like any kind of agronomy, there are different varietals that are grown for different purposes. Feed corn is different from seed corn, which is different than the corn used for fuel. They all carry different prices.

    A better analysis would be that if the demand for “fuel corn” increased, farmers would devote more of their acreage to it, rather than other varietals. That could, in turn, raise the price on corn that is used for corn syrup, which Heineken may use to brew their beer. (Note to self: re-evaluate my choice in beer).