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Re: Couple of new articles: even more impact on barley prices could be coming
I realize this thread is really more about the environmental impact of
ethanol production, but I wanted to clarify something about barley.
First, barley prices have not and will not rise due to the US mandate
of more ethanol production from corn. Corn is planted in different
soil and different climate. In other words, barley fields are not
being replaced with corn. Second, the US only produces about 5% of
the world's barley for malting. Canada, Europe, and Australia produce
most of it.
So what is driving up the price:
1) Bad crops the last two years. For example in 2006, Germany lost
75% of its barley crop.
2) Asia loves beer, but can't grow barley. As a result, they are
importing more and more, driving up prices.
3) The dollar sucks against the euro and canadian dollar. This makes
it more expensive to buy barley.
4) Bio-diesel. Europe has a big push for bio-diesel. And it makes
sense given most cars there run on diesel. The problem is canola
beans can be used for bio-diesel, and these beans can be grown in
place of barley. So some acreage is getting replaced.
So you are right that prices will probably remain high, but for
reasons that have little to do with US policy.
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