Brewers lament poor crop
Quality of grain affected by rainy weather
Bad weather from Canada to Europe is about to alter the economics of the beer industry’s fastestgrowing market.
Craft brewers like Jeff Orr, who co-founded Tool Shed Brewing in Calgary, rely on high-grade barley malt used to create the unique flavours that have led to a boom in the popularity of small-batch beers. Malt accounts for 43 per cent of Orr’s ingredient costs. But this year, grain quality has dropped after parts of the Prairies got three times the normal rainfall.
And it isn’t just in Canada, the world’s sixth-largest barley grower. France and Germany, the biggest producers after Russia, are also harvesting less this year because of heavy rains. Global barley output is set to drop for the second time in three years, U.S. Department of Agriculture data show. That’s boosting costs for brewers, and some are passing that along to customers.
“We don’t have a lot of choices,” because malted barley is essential to the process, said Charlie Bredo, co-founder of Troubled Monk Brewery in Red Deer, Alta. “At the end of the day, you’ve got to filter that down to the price per pint.”
In Canada, where beer is the most-popular alcoholic beverage, demand for craft brews is growing a lot faster than mass-produced products like Molson or Budweiser. The number of licensed breweries has more than doubled in the past five years to 644, with three out of four producing fewer than 23,500 cases, according to Beer Canada, the industry association based in Ottawa.
Craft brewers use one bushel of barley (49 pounds) to make about 300 bottles of everything from pale ales to stouts, while makers of mass-produced beers usually stretch the same amount of grain to make 400 or 500 bottles, according to Rahr Malting Co., a supplier of malt with a plants in Alix, Alta., and Shakopee, Minn.
Higher costs for malt were a bit of a surprise. A global grain surplus has kept prices low for everything from corn to wheat. But all that changed after the rains began falling during the summer months.
A deluge in Alberta, Canada’s biggest barley producer, has slowed the harvest, the province’s agriculture ministry said in an Aug. 26 report. Of the 350 millimetres of rain recorded this year, two-thirds arrived after mid-May.
“It’s just one big mess on my farm,” said Trevor Petersen, 53, whose 400 acres of malt barley got so wet that it started to grow sprouts. “It’s raining as I speak,” he said Sept. 8. “It just won’t quit raining.”
When barley gets too wet, it starts to germinate in the field. That makes it more difficult to convert the grain into malt, said Kevin Sich, the supply chain director at Rahr Malting, one of Canada’s biggest processors. Malt companies need barley to be dry enough so that they can start and then halt the germination process, which changes the starches into sugars that can then be used by distillers and brewers, Sich said.
While the Canadian government still expects domestic barley output to rise 5.8 per cent from last year, the quality will suffer. Malt processors and brewers will have a harder time finding good supplies this year, said Peter Watts, managing director of the Canadian Malting Barley Technical Centre. Some may need to lower their standards because less of the Canadian barley crop will be good enough for making malt, he said.
Malt barley prices have already risen 25 cents a bushel in the past month, according to Central Ag Marketing.