Ethanol Blamed for Increase In Food Prices

In national news: Ethanol has become the Ire of Increased Food Prices

The rising cost of food prices nationwide have left many trying to figure out who to blame.

The stomachs of Food Industry Executives are growling that commodities costs will steadily increase as long as the US Government subsidizes corn growers for making ethanol.

This leaves the ethanol industry at the business end of many a pointing finger.

With many farms switching over to corn production due to its lucrative prices, grains and hops have been thrown to the wayside. Corn is used as animal feed, causing livestock producers to increase the prices of meat. Grain shortages have also increased the price of flour, and in turn many bakers are starting to push the burden of higher overhead costs, onto the consumer.

Compounding the problem are rising fuel costs, which factors into the transportation costs of the produce displayed at grocery stores, and the flailing currency we call the U.S. dollar.

In turn, any extra stores of rice and grain are hotly desirable to more economically stable countries in need of food commodities that can be purchased with currencies suddenly gifted with more buying leverage against the U.S. dollar. With grain supplies dwindling, Americans are left to shell out more money for the basic staples of everyday living.

This fiasco is in part due to an energy bill signed into law back in December that calls for the production of 9 billion gallons of renewable fuel this year, and rising to 36 billion gallons in 14 years.

President of Kraft Foods, Rick Searer, said, “We certainly as a society want to decrease our dependence on foreign oil…Unfortunately, the biofuels mandate is having unintended consequences in terms of its impact on the price of food.”

General Mills CEO, Kendall Powell, proposed nonfood options for biofuel feedstock as a viable step, saying, “It would be good if we could develop a really efficient and economic biofuels industry based on switchgrass or cellulose waste products.”

Last month at a lecture on biofuels at the Berkeley Reperatory Theater, Jerry Tuskan of the Joint Genome Institute, talked about Poplar trees possibly being used as biofuel feedstock to create ethanol.

The options are out there, yet government backing is needed.

Another industry that lays ethanol out with a dose of blame, are the craft and microbrew industries that line many of the Western States.

Brewers are feeling the pinch as hops and barley malts are increasingly harder to procure at reasonable prices. Price increases on beer are expected to take place in the next few months.

However, a local beer enthusiast said, “I’d be willing to pay an extra dollar for good beer, instead of settling for the swill that the corporate brewers churn out.” He then added, “It is accepted for people to pay more for quality wine, why not for quality beer?”

Hop Shortage to Drive Beer Prices Up

In national news, 2008 may be dubbed The Year of the Hop Shortage

Hop plants, the small cone-like flowers that bless your beer with bitterness and aroma while providing a counter balance to the beers malty sweetness, are in a worldwide shortage.

Breweries across the U.S. are scrambling to secure hops in order to produce the beers that craft beer enthusiasts have come to love. An increase in beer prices is expected to take place in the coming months. Contributing factors are: the hop scarcity, a strong Euro, increased fuel transportation costs, and the conversion of farm fields from barley malts, to ethanol producing corn.

China is also becoming the number one beer drinking market, creating international competition for hops, which are mainly grown in Europe and North America.

This means beer producers, including homebrewers will have to curb there ability to create new beers just to have enough hops to brew their traditional recipes.

Greg Obendorf, an Idaho hop farmer says, “This may put some small brewers out of business – there just aren’t enough hops to go around.”

To cope, breweries might have to adapt to a changing beer landscape. The wildly popular Pale Ales and IPA’s, which require a healthy dose of hops to give that bitter punch, might be put aside. In the future we might see craft brewers switching to beers that have a low hop profile and a greater use of grains and malts.

Ken Woods, president of Black Oak Brewery, says, “If farmers have ripped the hops out, [it will take] at least three years to grow new ones we can use. Hop prices have gone up 400%.” Woods also noted many hop farmers have switched to crops like corn and soy, which are seeing a steady increase in demand and price due to America’s push for Biofuels.

However, one local bar patron said, “I enjoy my beer and if it costs an extra dollar to have one or two, then so be it.”