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Agriculture Shift Causes Beer Prices to Rise

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Agriculture Shift Causes Beer Prices to Rise


Agriculture Shift Causes Beer Prices to Rise

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  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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Back now with DAY TO DAY.

Perhaps you'll celebrate our nation's independence today by drinking a beer. And maybe when you bought that beer, you noticed it cost a bit more than it did last summer. The Labor Department says the price of beer is up three percent. Now that may not sound like much, but it is higher than the overall inflation rate.

And one reason why beer prices are up may surprise you. It has something to do with the alternative fuel, ethanol. Joining us now is Ray Kimovitz. He's technical director of the Master Brewers Association. Welcome to the program.

Mr. RAY KIMOVITZ (Technical Director, Master Brewers Association): Hi, how are you?

COHEN: Good. First off, can you explain how exactly ethanol affects the cost of beer?

Mr. KIMOVITZ: Well, it has to do with market forces - the value the farmers get for what they plant. If they can get more per bushel for corn as versus barley, they're going to plant more corn. They're going to plant more corn over soybeans and barley. So…

COHEN: And corns are hot crop right now because of ethanol.

Mr. KIMOVITZ: Definitely. Yeah, I even see it around here in Wisconsin, every plantable acre, essentially, is going to corn. And the acreage that I've seen in the past years that were in soybeans, they're now in corn, which drives the price of barley up because there's less available.

COHEN: And, of course, we prefer drinking beer made with barley as opposed to corn.

Mr. KIMOVITZ: Well, you really can't make beer with a 100 percent corn. I guess you could, but it's not really done. American lager beer has a portion of corn in it - always has. But most of the craft brewers and the high-end beers, most of them used a 100 percent malt - malted barley.

COHEN: Barley isn't the only reason we're seeing higher beer prices this summer. What else has been going on in the industry?

Mr. KIMOVITZ: Aluminum, price of aluminum is up. Stainless steel is up. So the microbrewers that are building new breweries these days are having to pay more to - just for a construction costs.

COHEN: So real quickly, Ray, how much more do you think we might wind up paying for, let's say, a six-pack over the next few months?

Mr. KIMOVITZ: Oh, probably, you know, if you're paying $18 a case now, you may pay 50 cents more a six-pack. It all depends.

COHEN: Ray Kimovitz, of the Master Brewers Association. Thanks so much.

Mr. KIMOVITZ: Oh, you're welcome.

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