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Insurance Currently Available to Farmers Growing Malt Barley In Four NYS Counties; Schumer Calls on Feds To Immediately Expand Vital Malt Barley Crop Insurance For More NYS Farmers

Due To NYS Law, Over Next Decade Most NYS Craft Brewers Will Be Required To Source 90% Of Ingredients From Local Farms & Malt Houses; 1886 Malt House Ready To Help Industry Meet Ingredient Demand, But Their Growing Partners Need Security

Schumer: USDA Needs To Hops on Board Effort To Spread Malt Barley Insurance Across NYS

Standing at the 1886 Malt House in Oswego County, U.S. Senate Minority Leader Charles E. Schumer pushed the U.S. Department of Agriculture (USDA) to expand access to malt barley crop insurance to growers across New York State. Schumer explained that there are currently only four counties that have access to federally backed malt barley insurance coverage in New York State, even though farmers in other states have broad coverage. Schumer pointed out that the state-of-the-art 1886 Malt House is a critical link in meeting the local ingredient needs of farm and craft breweries across New York State, but said that most of their partners in the regional malt barley farming community lack critical insurance to grow the crop, which needs very specific conditions to grow and is susceptible to severe weather and disease. Schumer said that access to this crop insurance will become increasingly important because, over the next decade, New York State will require farm craft brewers and distillers to source 90 percent of ingredients from local farms and malt houses, and the supply of malt barley will need to increase to meet this demand.

“Distilleries, breweries, and malt houses like the one here in Volney pour local products and jobs into our economy, which is why it is important that we continue to support this industry by providing them with every available tool necessary to continue to grow.” said Senator Schumer. “But the lack of federally backed insurance for malt barley is preventing farmers from planting this crucial crop. Without protections, the risk is just too high for some, and that could prevent our malt houses, craft breweries and distilleries from meeting requirements of New York’s Farm Brewing Law. In order to meet the current demand of craft brewers and distillers, New York State growers will need to significantly increase their malt barley production. That is why I am calling on the USDA to expand access to this vital product beyond the 4 New York State Counties that can access it now. It is time to make this insurance available across the state so that our farmers, malt houses, distillers, and brewers can tap into their full potential.”

Schumer highlighted the success of the growing craft brewing industry in NY. 1886 Malt House is a state-of-the-art facility that cost $12.5 million to build. The name 1886 commemorates a time when the craft beverage industry was booming in New York State. It is also the year that the Statue of Liberty was gifted to the United States. The plant will be completed in 2017 and it will supply more than 2,000 tons of barley malt each year, which makes it a significant supplier of barley malt to the craft brewing industry in the U.S. Over the course of 2016 and 2017, 1886 Malt House has contracted malt barley with growers in Genesee, Orleans, Madison, Oneida, Erie, Onondaga, Niagara, Cayuga, Franklin, and Otsego counties but seeks to continue to grow their contacts across New York State. Currently the facility has 500 acres of the crop under contract for 2016 and 700 acres under contract for 2017. This has and continues to be a boom for local farmers and it serves as a significant step forward for the craft brewing industry in New York. Schumer stressed that supporting these farmers and Malt Houses will help ensure this growing industry continues its momentum.

Schumer explained that there is currently a need for increased malt barley production throughout New York State as a result of its burgeoning 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 Central New York farmers are beginning to grow this barley, which they then often provide to malt houses like 1866 Malt House. These 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 beer industry has been growing throughout New York State over the past few years and in the Central New York. This growth has increased the need for local ingredients, like hops and malt barley. The hops industry has already taken off, however hops are needed in much smaller quantities than malt barley. For example, to make a typical half-keg worth of beer (15.5 gallons) less than five pounds of hops would be required. Conversely, the amount of malt barley needed ranges from 35-50 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 the industry needs.

Schumer said that this is especially important because, over the next decade, New York State is expected to require farm 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 Brewery 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 locally 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 Brewery 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.

Last year, Schumer successfully pushed the USDA to bring malt barley insurance to Cortland, Otsego, Ontario, and Genesee Counties for the first time, but said that the USDA needs to continue expanding access to this crop Insurance coverage across NY. New York State has approximately 2,000 acres of malt barley, which will be used by the 9 malt houses including 1886 Malt House. In the future, NY barley farmers will have to significantly increase barley production to meet the needs of New York State brewers and distillers.  

Schumer was joined by plant General Manager Tim Hardy, Erin Tones Manager of Marketing and Logistics, and Maltster Noel McCarthy, as well as employees and local elected and economic development officials.

A copy of Schumer’s letter appears below:

Dear Acting Secretary Young, 

I write today to bring your attention to an ongoing problem affecting many New York farmers and small businesses.  I would like to thank the United States Department of Agriculture (USDA) for offering crop insurance for malt barley in New York this year for the first time in 4 counties, however it is imperative that this insurance program be expanded across New York State.  This crop insurance will allow farmers to scale up New York’s malt barley supply chain to provide for the increased demand for 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 malt barley insurance, producers may decide to forgo planting this crop, which will hold back agriculture and craft breweries across the state.  

Currently the only barley insurance available in many parts of New York State is for low-value livestock-feed grade barley, which is inadequate to insure the value of much costlier-to-produce high quality barley varieties used for malting.   Thus, a true malt barley crop insurance product, like those now offered in 4 New York counties, must be expanded across the state to both help current growers manage their risk of growing higher value barley for malting and to remove a barrier that now discourages more farmers from planting malt barley.  Additionally 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.  Particularly in New York, 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. 

Although USDA created a national malt barley crop insurance option beginning in the 2011 growing season, it is currently offered in only a fraction of New York State in part because malt barley has not been historically farmed in New York.  However, the same factors that propelled New York State to become the nation’s third largest wine producing state over the past thirty years are now driving New York to become a leading producer of beer and craft distilling using New York farmed or produced ingredients such as malt barley  Therefore, I urge USDA Risk Management Agency (RMA) to continue to expand its malt barley crop insurance program across the state while engaging with the New York State malt barley industry to allow for this crop insurance product to thrive statewide.   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 expansion of this insurance available 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.