Corn subsidies raise beer prices, blood glucose

Beer is king among the college kind. Whether it’s stout, ale, lager, or ultra light, there’s a libation for anyone with a discerning palate for brew — and with local bars selling dollar drafts some nights, there’s a brew even for the discerning wallet. But soon that $1 price tag may reach upwards of a buck fifty.

The price of barley, one of beer’s main ingredients, has been on the rise for the past five years, while barley production has decreased by almost 15 percent since last year. According to statistics released by the U.S. Department of Agriculture, average prices have steadily risen, ending at $3.16 per bushel at the end of December 2006 — nearly a 24 percent increase from the end of 2005.

Essentially, farmers are finding it’s a lot more lucrative to grow other crops instead of barley, particularly corn. Corn has been the king of cash crops for quite some time: It’s a favorite vegetable for human consumption and one of the top ingredients used to feed livestock. It can be converted into corn syrup (used to help quench Americans’ thirst for soda) and
into ethanol for car fuel.

Even the U.S. government supports corn, subsidizing its production to make it almost “easy money” for farmers. For instance, say that it costs farmers $1.20 to produce one bushel of corn, but consumers are only willing to pay 80 cents for a bushel. The government subsidy will then pay the 40-cent difference to the farmers, plus extra so that the farmers make a profit.

Because of corn subsidies, even the most beer-devoted barley farmer is tempted to begin growing corn instead. For beer drinkers, a decreasing number of barley farms means less barley to go into the beer.

It should be no surprise, then, that two large beer breweries, Anheuser-Busch of St. Louis and Mexican bottling company Femsa, both announced they would be raising prices early this year. Budweiser and Corona fans alike may have to dig a little deeper into their pockets to pay for beer.

Besides raising beer prices, corn subsidies could also affect health. As reported by the environmental magazine Grist, the large subsidy on corn makes it much cheaper for food and drink companies to sweeten their products with corn syrup instead of granular sugar. The problem? Corn syrup contains a significantly higher amount of glucose than other sweeteners, a trait that has been linked to an increase in the occurrence of Type II diabetes.

The phrase “Cut the fat” could soon become “Cut the corn.” Reducing corn subsidies, and therefore reducing the amount of corn produced, would keep us happy (low beer prices!) and healthy.