Enjoy that cheap 12-pack of Milwaukee's Best while you can. According to a new report, the price of barley (a very important ingredient in that frosty mug) is set to rise due to more farmers planting crops for ethanol. High demand for biofuel feed stocks — such as corn, soybeans, and rapeseed — are causing farmers to follow the money and plant these crops instead of grains like barley. In the U.S., which at one point was a top exporter of barley, the amount of land for the crop has decreased from 13 million acres in 1985 to only 4 million today. From the article,

"Jean-François van Boxmeer, chief executive of Heineken, the Dutch brewer, warned last week that the expansion of the biofuel sector was beginning to cause a "structural shift" in European and US agricultural markets. One consequence, he said, could be a long-term shift upwards in the price of beer. Barley and hops account for about 7-8 per cent of brewing costs."

This ripple effect of the ethanol industry is coming at a time when the U.S. is seeking alternatives to dependency on foreign oil. Already, ethanol is required as a fuel additive in the USA as a substitute to MBTE (an additive that was found to be noxious). With so many lucrative opportunities available to cash in on the shift, American farmers are looking beyond traditional crops that make less money. Unfortunately, it will mean less of everything as a result. So, enjoy each sip. They're about to get more expensive.

source: the oil drum