Sorry, beer lovers, but there's trouble brewing.

The global food crisis has pushed up commodity costs, sending consumer prices climbing for many of life's staples.

Louie Favorite/AJC (ENLARGE)

Brent Kelley takes freshly bottled beers from the final rinse and places them into packaging at Atlanta Brewing Co. • More photos

Has the economy changed your beer-drinking habits?   Absolutely. Beer is beer.   No way. I'm worth it.   I always drank cheap beer.   I don't drink beer. Voter Limit: Once per Hour View Poll Results FOOD PRICES: A LOCAL LOOK High fuel costs help, hurt local farmers who want to deliver Higher milk prices don't mean more profits for farmers Tough times chip away at snack sales Deals at Whole Foods? Tour shows you where | Photos Diesel spike means rough times for seafood prices Restaurants feel squeeze from both ends of economy Economic toll nips at scotch buyers, too Beer prices rising | Photos Egg price reflects soaring costs for diesel, feed | Photos Groups that feed families on edge are pushed to limit Poor not only ones feeling pressure This is an occasional series on how rising global food prices are affecting people and businesses in metro Atlanta.

Gasoline. Bread. Beer.

Some might argue that the comparison is unfair — after all, you can live without bread and gasoline. But necessity or not, breweries have found themselves squeezed hard between what they pay and what they can charge.

"You've got to manage your costs as effectively as you can and get as much as you can in the market," said Robert Budd, president of the Atlanta Brewing Co. "Your profit margin is going to fluctuate."

There is a range of reasons behind the rise in food prices.

Demand for food is up, driven heavily by the expansion of incomes in Asia, mainly India and China.

Supply has not fallen, but millions of acres that could have produced more grain have been shifted to corn for ethanol. Meanwhile, the long slide of the dollar's value has undermined consumer buying power. That decline in turn has prompted many investors to put their money into commodities from crude oil to cocoa, from pork bellies to barley.

The price hikes have even put profits of multibillion-dollar beer conglomerates under pressure.

For instance, $17 billion-a-year Anheuser-Busch Cos. — which claims slightly more than half of the nation's beer sales — blamed rising costs of ingredients as it reported a 1.4 percent slip in profits during the first quarter. The company said it was raising prices on most of its products.

The margin of error is narrower with small operations with little marketing muscle and limited cash flow — like $1.3 million a year Atlanta Brewing Co., one of a handful of breweries in the South.

Beer drinkers, of course, know that the price has been climbing. Beer-makers say their own costs have risen much more.

But you don't raise prices without some sober-minded care, Budd said.

A tiny brewery simply cannot get out ahead of the rest of the market — no matter how much costs are increasing, he said. "We tried a small increase last year, but it didn't stick. You can kill yourself by pricing yourself out of the market."

So they waited until larger breweries raised their prices, he said. "There is a saying that the big guys price to cost. The little guys price to the market."

Over the past two years, the list price for Red Brick six packs has gone from $6.49 to $8.99, he said. "That still does not cover all of our added food costs. It means that our profit margin is not as big as it was."

Like other businesses, beer-makers face high energy costs that make it more expensive to operate and more costly to truck products. The tab is rising, too, for materials — aluminum for kegs, cardboard for cases, glass for bottles.

Perhaps the worst of the squeeze comes from beer's most distinctive ingredients: barley and hops.

Atlanta Brewing Co.'s Red Brick Blonde uses two hops and one malted barley. A brown ale has three types of hops and eight malts. The highest hop content is in its Peachtree Pale Ale.

New contracts for hops, the vine that adds aroma, flavor and a balance of bitterness, have been running well above $21 a pound, Budd said. "Two years ago, hops were $2. Now, buying hops — even at $5 a pound — that is a dream."

The calculation is similar for most brewers.

Barley is up 82 percent since last year, aluminum for kegs is up more than 20 percent and bottles cost 18 percent more, said David Guender, director of sales at SweetWater Brewing Co., another Atlanta brewery.

Yet discussions about rising costs begin with hops, he said. "It certainly is the main ingredient. We definitely feel the pain."

Overall costs are up 17 percent to 20 percent just in the past eight months, he said. SweetWater's prices are up about 7 percent in that period.

"Fortunately, the loyalty of our customers and new customers is very strong," he said.

The brewers hope that higher prices bring their own solution. If more farmers are drawn to those profitable crops, the more ample supply will dampen prices. Even at best, that could take one growing season.

Still, when it comes to higher prices, customers of premium beers may be a little more forgiving than the average beer buyer.

To them, the taste of different beers differs dramatically. Enjoying a fine beer is more like sampling Bordeaux at Robert Parker's place than drowning your sorrows from the keg at the Beta house.

"It is all about the taste," said beer aficionado Matt Mashburn, partner in the Atlanta office of law firm Stites & Harbison. "If you don't like beer, you haven't tried enough of them — or at least tried the type that appeals to you."

Mashburn's own tastes run toward Hazelnut Brown from Rogue Brewing as well as some SweetWater brews like the 420 Extra Pale and the Hummer.

A pint costs him about $4. But really, the beer is just part of an evening's expenses. He doesn't pay close attention.

"If you have three or four beers when you are having dinner or going out entertaining, well, if it goes up a buck and a half, I don't think you'll notice it."

RISING COSTS

Barley

• 2002: $2.72 per bushel
• 2007: $4.10 per bushel
• 2008, projected price: $4.58 per bushel

Hops

• 2002: $1.91 per pound
• 2007: $2.81 per pound
• 2008, preliminary price: $6.36 per pound

— Source: National Agricultural Statistics Service and the Risk Management Agency at the Department of Agriculture