Wednesday, April 23, 2008

Who Cares about Rising Grain Prices? Beer Drinkers!

There are more serious problems with global inflation, which I talked about a few days ago here. However, my friend Dan, a fellow beer drinker and home brewer, pointed me to a recent article in the Miami Herald. Earlier I discussed the hops crisis, but grain price increases are also leading to price increases in beer. It seems the price of beer is rising on the order of 40% for microbrewed beers, which Dan and I like to drink. How are people responding, I like this quote from the article.

''It is a big hit,'' Foye said as he leaned over a microbrew at the bar of Beachwood BBQ in Seal Beach, Calif. He doesn't drink enough beer to make higher prices a ''budget buster,'' yet Foye still finds it ``irksome. . . . . It's like gas prices; what are you going to do about it?

Beer consumption is also being impacted by the housing price crisis (OK I’m not sure by how much), but this Miami couple is drinking less beer in response to a dive in their home prices. Although this should lower beer prices.

Even home brewers are not immune to the price shocks. As noted on the Northern brewer forum, grains for home brewers have seen price increases of 20% in the past 9 months.

How big a deal is this increase. People in my age group spend only about 1% of their total budget on alcoholic beverages according to Consumer Expenditure Survey, compared to about 5% on gas. Wonder what it would be for the average college student?

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