I’m unlikely to post links for every bourbon-related story that emerges about the midwest drought, but I’ll follow it until I convince the rest of you to pay attention.
I imagine that feedstock price accounts for a very small percentage of cost. In brewing the cost of malt accounts for 5-10% of total cost, and I suspect that percentage is even lower for distilling (with considerably higher energy, tax, and storage costs). So while corn prices might double, the impact to the final price would quite small. The bigger issue would be if the quality/availability was very low, but due to the time lag between production and sale distilleries should be able to pay a premium over other purchasers (basically a type of commodity future, albeit a non-traditional one).
I imagine that feedstock price accounts for a very small percentage of cost. In brewing the cost of malt accounts for 5-10% of total cost, and I suspect that percentage is even lower for distilling (with considerably higher energy, tax, and storage costs). So while corn prices might double, the impact to the final price would quite small. The bigger issue would be if the quality/availability was very low, but due to the time lag between production and sale distilleries should be able to pay a premium over other purchasers (basically a type of commodity future, albeit a non-traditional one).
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