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Rolla, ND | Just think every bushel of barley you grow makes 32 gallons of beer.
Every 32 gallons of beer is taxed $17, that the federal barrel tax. This is only the first tax. So if you have 60 bushel malting barley, the federal government gets a check for $1020 an acre from your barley just as soon as it is brewed.
By the time it gets drank about 1/2 the retail price is taxes.
That probably figures out to several thousand dollars an acre in taxes on your barley. Let's see 60 bushels equals 60 barrels at 333 bottles per barrel. That's 19980 bottles of beer an acre. If average retail is 80 cents and they take half that's 40 cents a bottle (I think that's a little low) which figures out to $7992 in taxes an acre. At 80 cents a bottle, a 1000 bushel semi-load of barley represents a "street value" of $266,400. Just think if you brewed and sold one truckload of barley a year you could gross a quarter of a million dollars. Of course you have to buy hops too. Wholesale they should run you about $1.50 a barrel of beer. So you'd have to buy like $1500 of hops to add to the barley. Nope, margins will never support that! Those hops farmers are just stealing from those poor beer companies.
Then the government cries about "subsidizing" you a few bucks.
I bet if they got rid of the taxes, consumption would jump enough you could do just fine without the "subsidy". Or maybe they would split the taxes 50-50. Nah, they'll just free trade you away, need to get commodities lower if there's going to be enough margins to make it on.
Marv
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Coors Top Grower
