Posted: November 14th, 2007 - 9:04pm by Doug Powell

$100-a-barrel oil means more farm acreage to biofuels and a bunch of pissed-off Germans.

The Chicago Tribune reports that the German beer industry is bracing for a 10 percent to 15 percent price increase early next year and as much as 40 percent over the next five years because of generous European Union subsidies to farmers who grow crops used in the production of biofuels.

Many farmers have switched from growing barley -- used to make malt, the main ingredient in beer -- to crops such as rapeseed and corn. This has driven up the cost of barley to more than $410 from $190 a ton last year.

Stefan Haase, 44, an advertising executive in Berlin, said,

"Of course I'm not happy about a price increase, but it won't stop me from drinking my daily after-work beer. Or two. But there are many unemployed in Germany, and for them the evening beer in the neighborhood pub is their only social contact. A price increase would be traumatic for these people."

Beer drinking may be deeply ingrained in German culture, but the biofuel juggernaut appears to be unstoppable. Of Germany's 30 million acres of agricultural land, 5 million are now dedicated to growing biofuel crops. Barley production fell 5.5 percent in 2007.

Unlike the U.S., where the market is dominated by a handful of large national brewers, Germany has more than 5,000 beers produced by 1,284 brewers.

The variety reflects pronounced regional preferences in taste. Beer drinkers in northern Germany, for example, like a sharper, bitter beer, while in the south the preference is for a milder brew.

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