Electric Brewing Supply 30A BCS Giveaway!


Home Brew Forums > Home Brewing Beer > General Beer Discussion > Cost increase in grain
Reply
 
LinkBack Thread Tools
Old 09-08-2007, 05:42 PM   #1
bandt9299
Feedback Score: 0 reviews
Recipes 
 
Join Date: Feb 2005
Location: Hubbardston, MA
Posts: 263
Liked 4 Times on 4 Posts
Likes Given: 2

Default Cost increase in grain

Just got back from my LHBS and he told me that the price of grain is going to increase 2 fold in the upcoming months, needless to say he was very discouraged, as was I. Time to buy a few hundred pounds. What have you guys heard?

__________________
bandt9299 is offline
 
Reply With Quote Quick reply to this message
Old 09-08-2007, 06:06 PM   #2
Sir Humpsalot
HBT_LIFETIMESUPPORTER.png
Feedback Score: 0 reviews
 
Sir Humpsalot's Avatar
Recipes 
 
Join Date: Nov 2006
Posts: 4,043
Liked 82 Times on 66 Posts
Likes Given: 22

Default

This is the third time this topic has come up. You are NOT buying grain. You are buying MALT!!!

The cost you pay for your malt includes the cost of buying the grain. And the cost of storing it in the silo, paying for the silo and the person to manage them and maintain the silos. It also includes the cost of shipping that grain to the maltster. To ship it there, they have to pay a train engineer to drive a train loaded with malt. And they have to pay the maintenance guys to maintain the trains and the tracks. Then they pay the guys to offload the grain into the maltster's facility. Then there's the cost of malting the grain- energy, time, and space is required for the process. And of course, you have to pay the maltster so that he can feed his family. And you also have to pay all the employees of the maltster! They don't work for free! Don't forget that the malt has to be bagged and stored. Bags cost money. After an order is placed (by an ordering department somewhere), the bags probably go on another train to another storage facility. Right there is another train engineer and a bunch of track workers who also need to get paid. Then, they off-load the sacks and store them in a warehouse. Warehouses require real estate and facilities. Warehouses. And a warehouse manager. And that warehouse manager needs to feed his family too! And he manages employees and forklifts and keeps the roof repaired on the warehouse. And all those people who work around that facility, even the roofers, all have families to feed. And then the warehouse has a shipping department and that shipping department negotiates for cheap trucking prices and they get that grain trucked to the LHBS or the brewery- in exchange for their salary. So they get paid, and so do the truck drivers who drive the malt. After all, truck drivers have families too! Then you have your LHBS who needs to feed his family and pay rent in a retail district to sell you the grain.

The bottom line is, the price of grain is maybe eight cents a pound. the cost of malting, storing, transporting, and of course, profit accounts for the remainder of what you pay... When you really think about it, it's amazing that ANYTHING can get to your door for less than a dollar a pound!!!!!

Anyway, the "price of grain" just includes whatever the farmer is paid to grow it. That's like maybe eight cents a pound, I believe. So a fifty percent increase is an extra four cents a pound.
An extra four cents a pound isn't going to break the bank for me...

__________________
In Process: Mango Beer, Homebrewers Pale Ale
Bottled/Kegged:Spicy Light Rye, Rice-adjunct Pale Ale, Mild Bourbon Porter, Roasty Stout, Basic Light Mead, Bourbon County Stout Clone
Up Next: Berlinerweiss, Chocolate Raspberry Ale, and American IPA

Sir Humpsalot is offline
BigRock947 Likes This 
Reply With Quote Quick reply to this message
Old 09-08-2007, 06:11 PM   #3
Bobby_M
Vendor and Brewer
HBT_SPONSOR.png
Vendor Ads 
Feedback Score: 2 reviews
 
Bobby_M's Avatar
Recipes 
 
Join Date: Aug 2006
Location: Whitehouse Station, NJ
Posts: 22,109
Liked 1020 Times on 680 Posts
Likes Given: 28

Default

If by saying "two fold" he thinks going to need to charge $80 for a sack, he's way off. Let's say he's right, that increase would carry down all the way to commerical beers so homebrewing all grain wouls still fall in the same value as it does today.

__________________
BrewHardware.com
Sightglass, Refractometer, Ball Valve, Weldless bulkhead, Thermometer, Decals, Stainless Steel Fittings, Compression Fittings, Camlock Quick Disconnects, Scale, RIMS tube, Plate Chiller, Chugger Pump, Super Clear Silicone Tubing, and more!

New Stuff?
Bobby_M is offline
 
Reply With Quote Quick reply to this message
Old 09-08-2007, 06:11 PM   #4
ohiobrewtus
Feedback Score: 0 reviews
 
ohiobrewtus's Avatar
Recipes 
 
Join Date: Nov 2006
Location: Ohio
Posts: 7,814
Liked 37 Times on 35 Posts
Likes Given: 4

Default

I've heard that the cost of grains could be going up a bit due to farmers getting government money for growing corn (for E85 and other alternative fuels), but I have not heard that prices would be doubling. That seems quite high to me. How honest is the owner of your LHBS?

__________________
Quote:
Originally Posted by the_bird
Well, if you *love* it.... again, note that my A.S.S. has five pounds.

ohiobrewtus is offline
 
Reply With Quote Quick reply to this message
Old 09-08-2007, 06:12 PM   #5
The Pol
Feedback Score: 0 reviews
Recipes 
 
Join Date: Feb 2007
Posts: 11,616
Liked 54 Times on 51 Posts

Default

$.04/lb!? Okay, I have a brand new AG system for sale... wait, then I could afford grain.. but Id have no brewing equipment! Umm, I am asking my boss for a raise to fund my obsession.

__________________
The Pol is offline
 
Reply With Quote Quick reply to this message
Old 09-08-2007, 06:18 PM   #6
Orfy
For the love of beer!
HBT_LIFETIMESUPPORTER.png
Feedback Score: 0 reviews
 
Orfy's Avatar
Recipes 
 
Join Date: Sep 2005
Location: Cheshire, England
Posts: 11,853
Liked 69 Times on 52 Posts
Likes Given: 30

Default

If the cost of grain goes up by a % then this doesn't mean malt goes up by the same %. If it does you are being ripped off.


Quote:
The article reports that Colorado Commissioner of Agriculture John Stump explains the price of agricultural raw materials is just a small fraction of the price of most processed foods. In his more accurate example he shows the real impact of barley price increases:

"the price of barley is now about $4 for a 46-pound bushel. It typically takes about a pound of barley to produce a gallon of beer. Thus, even with today's higher grain prices, the barley in a gallon of beer costs about 9 cents - or roughly a dime for a six-pack of beer that sells for anywhere from $3 to $5 in a package store and far more if the barley is brewed into the kind of "craft beer" featured in Denver brewpubs."

So the TOTAL cost of barley, even with an increase, is just 9 cents out of a $5.00 six pack. For those of you without a calculator, that's less than 2%. OK, let's be precise, 1.8%.

The article then goes on and accurately explains the other cost drivers impacting beer prices:
__________________
GET THE GOBLIN
Have a beer on me.
Orfy is offline
 
Reply With Quote Quick reply to this message
Old 09-08-2007, 06:31 PM   #7
bandt9299
Feedback Score: 0 reviews
Recipes 
 
Join Date: Feb 2005
Location: Hubbardston, MA
Posts: 263
Liked 4 Times on 4 Posts
Likes Given: 2

Default

My home brew shop is excellent I get treated very well, and the prices are excellent especially for malt. His wife works there too and she is the one that told me that prices could almost double. Sorry for jumping to conclusions, but my shop is surely NOT a rip off by any means. So I kind of believed her. Doubling does sound a bit steep.

__________________
bandt9299 is offline
 
Reply With Quote Quick reply to this message
Old 09-08-2007, 06:40 PM   #8
Sir Humpsalot
HBT_LIFETIMESUPPORTER.png
Feedback Score: 0 reviews
 
Sir Humpsalot's Avatar
Recipes 
 
Join Date: Nov 2006
Posts: 4,043
Liked 82 Times on 66 Posts
Likes Given: 22

Default

Whenever economic factors come into play, retailers like to "prepare their customers for the worst". I'm not saying that they're going to lie to you, but the economic reality might look something like this:

Each person who has their hand in the grain industry, might see this "huge increase" as a great time to tack on an extra half of a penny per pound to their profit margin.

Instead of paying 8 cents a pound for barley, the maltster pays 12. So he increases the cost of his product, by 5 cents rather than 4. He blames it on the cost increases and nobody knows the difference. At the end of the day, the maltster has a little more money to feed his family. Then the truckers, and the warehouses, and distributors and everybody else will tack on a penny, or a nickel or whatever. By the time it gets down to the consumer, there is a price increase completely out of line with the economic reality. It kind of sucks at first blush, but don't think of it as being a rip off.

Prices fluctuate, income levels fluctuate. Sure, you might make a rock-steady $15 per hour because you work for a corporation, but "real life' isn't like that for business owners. Some days their margins get squeezed to hell due to market forces and people will squeeze every nickel and dime they can out of them. Other days, the market will just "accept" an increase because they know the market is afraid to push their suppliers too far. It's not really anybody attempting to gouge, it's just cut-throat businesses trying to reclaim their margins.

If they go too far though, a few players will take advantage of the over-reaching and go on another round of price cutting. So it's really nothing to fret about. Just accept that it's part of the capitalist system.... It's just folks, up and down the line, trying to take care of themselves. We can't really fault them for that, can we?



Cheers!

__________________
In Process: Mango Beer, Homebrewers Pale Ale
Bottled/Kegged:Spicy Light Rye, Rice-adjunct Pale Ale, Mild Bourbon Porter, Roasty Stout, Basic Light Mead, Bourbon County Stout Clone
Up Next: Berlinerweiss, Chocolate Raspberry Ale, and American IPA

Sir Humpsalot is offline
 
Reply With Quote Quick reply to this message
Old 09-08-2007, 07:28 PM   #9
homebrewer_99
Feedback Score: 0 reviews
 
homebrewer_99's Avatar
Recipes 
 
Join Date: Feb 2005
Location: Atkinson (near the Quad Cities), IL
Posts: 17,951
Liked 85 Times on 75 Posts
Likes Given: 1

Default

Quote:
Originally Posted by Damn Squirrels
Whenever economic factors come into play, retailers like to "prepare their customers for the worst". I'm not saying that they're going to lie to you, but the economic reality might look something like this:

Each person who has their hand in the grain industry, might see this "huge increase" as a great time to tack on an extra half of a penny per pound to their profit margin.

Instead of paying 8 cents a pound for barley, the maltster pays 12. So he increases the cost of his product, by 5 cents rather than 4. He blames it on the cost increases and nobody knows the difference. At the end of the day, the maltster has a little more money to feed his family. Then the truckers, and the warehouses, and distributors and everybody else will tack on a penny, or a nickel or whatever. By the time it gets down to the consumer, there is a price increase completely out of line with the economic reality. It kind of sucks at first blush, but don't think of it as being a rip off.

Prices fluctuate, income levels fluctuate. Sure, you might make a rock-steady $15 per hour because you work for a corporation, but "real life' isn't like that for business owners. Some days their margins get squeezed to hell due to market forces and people will squeeze every nickel and dime they can out of them. Other days, the market will just "accept" an increase because they know the market is afraid to push their suppliers too far. It's not really anybody attempting to gouge, it's just cut-throat businesses trying to reclaim their margins.

If they go too far though, a few players will take advantage of the over-reaching and go on another round of price cutting. So it's really nothing to fret about. Just accept that it's part of the capitalist system.... It's just folks, up and down the line, trying to take care of themselves. We can't really fault them for that, can we?



Cheers!
I think you're off a bit, but it comes down to this...every increase is passed on to the consumer...
__________________
HB Bill
homebrewer_99 is offline
 
Reply With Quote Quick reply to this message
Old 09-08-2007, 07:30 PM   #10
Orfy
For the love of beer!
HBT_LIFETIMESUPPORTER.png
Feedback Score: 0 reviews
 
Orfy's Avatar
Recipes 
 
Join Date: Sep 2005
Location: Cheshire, England
Posts: 11,853
Liked 69 Times on 52 Posts
Likes Given: 30

Default

Nothing wrong with a supplier increasing cost but they don't need to lie about it or blame in on someone else.

__________________
GET THE GOBLIN
Have a beer on me.
Orfy is offline
 
Reply With Quote Quick reply to this message
Reply



Quick Reply
Message:
Options
Thread Tools


Similar Threads
Thread Thread Starter Forum Replies Last Post
cost of all grain Julohan Beginners Beer Brewing Forum 20 06-02-2009 04:46 PM
cost of All grain vs extract ?? illnastyimpreza All Grain & Partial Mash Brewing 32 05-16-2009 10:32 PM
Cost: Extract vs. All Grain $$$$ RedOctober Beginners Beer Brewing Forum 12 10-13-2008 08:39 PM
My 2nd All-Grain / Massive Efficiency Increase! Tommish All Grain & Partial Mash Brewing 5 09-27-2008 04:49 AM
Cost of grain mbeattie All Grain & Partial Mash Brewing 12 02-23-2006 05:42 PM