07.19.17

SCHUMER: UPSTATE NEW YORK'S CRAFT BEER INDUSTRY IS BREWING AT RAPID PACE; SENATOR CALLS ON FEDS TO START PROCESS OF UNLOCKING MORE FED SUPPORT TO HELP NY BEER, DISTILLERIES AND LOCAL BARLEY GROWERS KEEP UP WITH SUMMER’S DEMAND & TOURISM

Schumer Says Insurance Currently Available to Farmers Growing Malt Barley Isn’t Enough; Will Urge Feds To Soon Start Offering Malting Barley Endorsement to NYS to Increase Protection Available For NYS Growers

Last Month, Schumer Successfully Pushed USDA To Provide Malt Barley Crop Insurance For 44 NYS Counties; Senator Says NY Needs Special Malt Barley Endorsement To Keep Up With Upstate's Craft Beverage Growth

Schumer: NY Could Become The Napa Valley of Craft Beer

Craft breweries and distilleries are booming this summer, pouring local products onto shelves, increasing tourism and infusing new jobs across Upstate New York. Which is why, U.S. Senate Minority Leader Charles E. Schumer today said it is imperative that the federal government provides even more support to Upstate New York’s craft beer industry to help new and existing establishments grow. Specifically, Schumer is urging the U.S. Department of Agriculture (USDA) to begin the process of giving New York the Malting Barley Endorsement (M.B.E.), a special federal insurance option, available to only a select group of states that grow malt barley. Malt barley needs very specific conditions to grow and is susceptible to severe weather and disease, making the M.B.E. insurance option an essential ingredient to further nurturing the growth of this new industry. Schumer said that this will become more important over the next decade, when New York State will require farm craft brewers and distillers to source 90 percent of their ingredients from local farms and malt houses, and the supply of malt barley will need to increase to meet this demand.

“With summer now in full swing many in Upstate New York and beyond are reaching for ‘Made in New York Craft Beers.’  These beers and spirits represent a new and flourishing industry for New York State, and Upstate New York is increasingly becoming the Napa Valley of craft brewing.  Not only do distilleries and breweries throughout Upstate New York pour local products and jobs into our economy, they also open new tourism opportunities, which is why it is important we continue to support this industry and provide them with all of the available tools needed to succeed now and in the future. New York is on the cusp of a craft brewing renaissance which not only benefits our growers, but all those who call New York State home,” said Senator Schumer. “That’s why I am calling on the feds to endorse this enhanced insurance protection for malt barley. These breweries are a reflection of New York’s entrepreneurial spirit and must be properly supported by growers who can supply them with the locally sourced resources they need.”

Schumer explained that there is currently a need for increased malt barley production throughout New York State, as a result of its burgeoning distilling and craft brewing industry. Alongside water, yeast, and hops, barley is one of the major components of beer, and of many spirits produced by distilleries. Malt consists of barley that is germinated and then dried under highly controlled conditions. These conditions help to release the enzymes needed to convert the barley starches into sugars. These sugars are then fed to yeast through the process of fermentation, which ultimately creates the final product - alcohol. Schumer explained that many New York farmers are beginning to grow this barley, which ends up being used to make beer and spirits. Malt houses take the barley seed grains and put them through the process of malting; this is so the barley seeds can begin to germinate and thus convert the starches into sugars. This malt barley is then given to brewers and distillers, who have the yeast and fermentation conditions needed to make beer and spirits.

Schumer noted that the craft brewing industry has been growing throughout New York State over the past few years, which has contributed to the success of countless breweries. This growth has increased the need for local ingredients, like hops and malt barley. The hops industry has already taken off, however brewing requires hops in much smaller quantities than malt barley. For example, to make a typical keg worth of beer (31 gallons) less than ten pounds of hops would be required. Conversely, the amount of malt barley needed ranges from 70-100 pounds. As a result, New York State will need more farmers to grow barley and more malt houses to convert that barley into malt if the suppliers are to keep up with industry needs.

Schumer said malt barley carries greater risks for loss and lower yields than barley grown for livestock feed, because in order to be viable for malting, the grain must meet rigorous quality standards. Many growers, who are covered by malt barley crop insurance, may run into obstacles collecting payments in certain situations.  Especially, in New York State, which can endure both heavy rains and long dry spells, entire crops may be deemed unusable if malt barley becomes too moist and prematurely germinates in the field, or conversely dries out and is unable to germinate during the malting process.  Due to the high risks for growers throughout New York State, Schumer said it is critical to allow growers to have the choice of obtaining all available federal crop insurance options as soon as possible.

Schumer said that the MBE will be especially important because, over the next decade, New York State is expected to require farm craft brewers and distillers to source 90 percent of ingredients from local farms and malt houses. Currently, 20 percent of all hops and 20 percent of all other ingredients, including malt barley, used by farm brewers licensed by the New York Farm Bureau are required to be grown or produced in New York State. However, by 2019, that proportion is expected to jump to 60 percent. By 2024, New York law will require no less than 90 percent of all farm craft beer ingredients be grown, or produced, within the state. Currently, for farm distillers, 75 percent of all ingredients must be produced within New York State. According to the New York State Brewers Association, while only the breweries and distilleries licensed as farm breweries are the ones required by law to meet the 60 percent (2019) and 90 percent (2024) ingredient requirements, most non-farm craft breweries and distilleries are also increasing their sourcing from local areas, so the pressure is mounting to supply New York State grown ingredients in the coming years.

Malt barley is a necessary ingredient in beer and spirits and, as a result of New York’s Farm Brewing Law, New York State will soon require farm craft brewers and distillers to source 90 percent of ingredients from local farms and malt houses. Schumer said expanding malt barley crop insurance offerings would mean that even more New York farmers will be able to grow malt barley, ensuring that the craft brewing industry has the resources it needs to continue to grow in Upstate New York.

New York State has 213 craft breweries:

  • In the Capital Region there are 29 craft breweries
  • In Central New York there are 27 craft breweries
  • In Rochester – Finger Lakes region there are 42 craft breweries
  • In Western New York there are 24 craft breweries
  • In the Southern Tier there are 32 craft breweries
  • In the Hudson Valley region there are 36 craft breweries
  • In the North Country there are 23 craft breweries

Previously, the lack of crop insurance hindered the rapid expansion of the craft brewing industry and therefore halted job creation in Upstate New York as well.  Senator Schumer applauded the USDA’s recent decision to expand Malt Barley crop insurance to 44 New York State counties in 2018, however he is now pushing for the USDA to begin the process of bringing the Malt Barley Endorsement to New York State.  This endorsement will allow farmers to ensure their barley crop at a higher level, the price which they are guaranteed in their malt house contract. Those contracts specify that the barley must be to a certain standard, but due to weather and other factors this can't always be met. An endorsement would alleviate this risk for farmers. 

In June, Senator Schumer announced that, after his push, the USDA would finally provide malt barley crop insurance for 44 New York State counties. Last year, Schumer successfully pushed the USDA to bring malt barley insurance to four New York counties but argued that with crop insurance now secured it is time for the USDA to grant Malt Barley endorsement.

A copy of Senator Schumer’s recent letter to USDA Secretary Perdue appears below:

Dear Secretary Perdue:

I write to bring to your attention an emerging problem that may affect New York farmers and small businesses in the near future.  I would like to thank the United States Department of Agriculture (USDA) for recently agreeing to expand the availability of crop insurance for malt barley in New York State to 44 counties for 2018.  However it is imperative that the USDA takes the necessary steps towards offering the malt barley endorsement (MBE) throughout these counties to provide further protection for our growers while continuing to promote the businesses that rely on this important crop.

As you know, the demand for malt barley is growing across New York in part because of the New York State farm Brewing Law that went into effect on January 1st, 2013.  This law requires New York farm brewery licensed brewers to source 60% of their ingredients from New York state farms or producers by 2019 and no less than 90% by 2024.  This major increase in demand for locally grown malt barley is a great boon to our New York State producers and agricultural industry.  However, without access to the MBE, some producers may decide to forgo planting this crop, which will hold back agriculture and craft breweries across the state. 

As you are aware, malt barley carries greater risks for loss and lower yields than barley grown for livestock feed because in order to be viable for malting, the grain must meet rigorous quality standards. It has come to my attention that without the MBE, some growers who are covered by malt barley crop insurance may run into obstacles collecting payments in certain situations.  In New York State, which can endure both heavy rains and long dry spells, entire crops can be rendered unusable if malt barley becomes too moist and prematurely germinates in the field, or conversely dries out and is unable to germinate during the malting process.  Due to the high risks for growers throughout my state, I urge you to dedicate the necessary resources to begin the process towards offering the MBE across upstate New York, which would provide additional quality protection for growers, as soon as possible.  Additionally, to help expedite this effort, I ask that the National Agricultural Statistics Service (NASS) invests resources into their surveys of New York malt barley production to aid in the data driven introduction of this product to New York farmers. 

I appreciate your consideration of this request that will help remove obstacles to scaling up New York’s malt barley supply chain while providing farmers with the opportunity to farm higher value-added malt barley I look forward to working with you on this important issue.

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