Reports on a study that says climate change could cause beer prices to double have been all over the news, science programs and late night comedy shows.
Few things related to food grab people’s attention more than beer, except maybe bacon.
With all the craft brewers around these days it’s easy for reporters to find a local business to talk about how they could be affected if climate change wreaks havoc on the world’s barley crops and causes the price of a prime ingredient in beer to rise.
With this story, which has the air of legitimacy because it was published in Nature Plants, a scientific journal, a global issue whose implications for the everyday person are hard to comprehend is brought into focus.
As late night comedian Steven Colbert quipped about the beer story: for collage frat boys, “climate change just got real.”
It must be frustrating for scientists who look at the overwhelming weight of research that clearly indicates that human activity, largely through the creation of greenhouse gases, is creating climate change that will cause serious problems for all of us and our environment and yet governments and individuals are slow to react.
So researchers are trying to determine the effects of climate change on specific places, industries and resources, hoping to show the negative effects on everyday people and forcing them to demand action.
But I fear that when delving into specifics the researchers can go beyond their ability to make accurate predictions.
This beer study is a bridge too far. I read the paper and admit I did not understand all of it. There appeared to be a lot of reliance on predictive models.
But a key point was that under the likely scenarios of a more changeable and sometimes hostile climate, global average barley yields could fall by three to 17 percent.
The paper correctly notes that malting barley production is highly dependant on weather, which not only determines yield but also how much of the crop has the attributes to make malt.
But as any malting barley producer knows, the value of the minuscule amount of barley in a bottle of beer is worth only a few pennies.
One bushel of malting barley can make hundreds of cans of beer. Craft brewers using only malt produce about 300 cans while the big companies add other ingredients to stretch it out to 450 or more.
Malting barley prices are currently around $5 a bushel, so there is around 1.8 cents of malting barley in a craft brew and about 1.1 cents worth in the mass produced stuff. The rest of the cost is in other raw ingredients, such as labour, energy, packaging, transportation and other ancillary costs and profits.
Here in Saskatchewan I see a private retailer selling 24-can packs of mass produced beer for $37, or $1.54 per can.
But we all know that governments love to tax beer and alcohol. Beer Canada, a group representing many of Canada’s breweries, recently commissioned a study (found at www.axthebeertax.ca) comparing Canadian and American taxes and other levies on beer.
It says federal and provincial taxes on beer, as well as the markup charged by provincial liquor commissions, amount to almost half the price of a case of 24. And that is before the goods and services tax is applied.
The actual amount of tax and markup varies by province, but you get the idea.
So that $1.54 can of beer, before taxes and markup, is roughly worth 77 cents. Remember, mass produced beer has about one penny of malting barley at a price of $5 a bushel.
To double the price of the can before tax, the value of the barley in the can would have to rise to 77 cents, meaning on a per bushel basis the price would have to be around $385.
That is just crazy.
Bad weather in several places in 2010-11 caused the global barley crop to fall by 18.7 percent and the following two years production remained curtailed and global stocks fell.
The price of barley rose, but only by several dollars a bushel, not by hundreds of dollars. The value of the barley in a single can of beer was still less than a dime.
I expect that even with more severe climate change, the situation won’t be anything like what the report’s authors suggest.
I am frustrated by these sort of academic exercises that seek to sensationalize climate change’s dangers. The body of evidence backing climate change was built up, brick by brick, over the decades by a multitude of scientists of many nationalities and fields of study. But one goofy report gives ammunition to those to argue the whole structure is rotten.
We do need to try to reduce our contribution to greenhouse gases and to prepare for a more volatile climate.
Climate disasters and their impact on crops are regional and they move around year to year.
The global prices of malting barley, or wheat or oilseeds, likely change little, but the incomes of the farmers in the devastated areas are slashed. That is who we should be worried about, not the beer drinker.