01.27.15

SCHUMER ANNOUNCES, FOLLOWING HIS PUSH, USDA & SBA TO HOST FIRST-EVER WEBINAR FEB 11th FOR NYS FARMERS, BREWERS & DISTILLERS INTERESTED IN GROWING MALT BARLEY – WILL IDENTIFY FED PROGRAMS TO HELP FARMERS & MALT HOUSES ADD EQUIPMENT & SCALE UP

Over Next Decade, Farm NYS Craft Brewers & Distillers Will Be Required By State Law To Source 90% of Ingredients From Local Farms & Malt Houses And, In Order to Match Demand, Production Must Increase 15x

Currently, Lack of High-Tech Equipment for Malt Barley Production Process Inhibits Growth – Schumer Previously Called on Feds to Partner with Local Malt Barley Farmers & Malt Houses to Tap Existing Financing For Equipment & Facilities Needed to Ramp Up Malt Supply Chain

 

Schumer Encourages Current or Prospective  Announces First Major Webinar Feb 11th For Local Growers to Partner & Learn About Fed Assistance, Opportunities – Schumer Vows to Continue Fighting For Fed Crop Insurance Growers Need to Increase Malt Barley Production Over Next Decade

 

Today, U.S. Senator Charles E. Schumer announced that, following his push, the U.S. Department of Agriculture (USDA) and the Small Business Administration (SBA) will be leading the first-ever major webinar in New York State for interested malt barley and hops farmers as well as craft brewing and distilling professionals to learn about available federal assistance and financing opportunities. The webinar will be held on February 11, 2015 from 1:30pm – 3:30pm and is intended for current or interested New York malt growers, hop farmers, brewers, distillers, malt producers, and others interested in supplying or expanding New York’s craft brewing and distilling industry.  Representatives from USDA, SBA, Cornell Cooperative Extension, and other government agencies will be available to answer questions, discuss loan and grant opportunities, available state and federal resources, program funding, program eligibility, and application deadlines.  Participants are encouraged to register online at: https://cc.readytalk.com/cc/s/registrations/new?cid=whmzzl0lhcem

Schumer previously called on the USDA and SBA to help educate local malt barley farmers on federal financing options that will help them scale up and add equipment and facilities, like on-site barley storage and climate controlled storage, in order to meet the increasing demand of local craft brewers and distillers for malt barley. Schumer explained that, over the next decade, New York State law is expected to require farm craft brewers and distillers to source 90 percent of ingredients from local farms and malt houses. Because the pressure is mounting to supply New York State grown ingredients in the coming years, Schumer said malt houses and farmers will need the equipment and facilities necessary to produce more of this risky, yet absolutely necessary, ingredient. Schumer previously asked the USDA and SBA to conduct outreach to the New York malt barley producers to help them access existing financing programs that can help this burgeoning industry scale up and afford the needed equipment and facilities that are now out of reach to many of today’s small but growing malt growers. Schumer is encouraging farmers, malt houses, and industry professionals from across the state to sign up and participate.

“Educating local farmers on growing malt barley and providing local malt houses with the information they need to scale up is a positive step toward growing the state’s malt barley industry,” said Schumer. “The federal government has a number of programs and funding opportunities that can help farms and malt houses thrive, and I am pleased the USDA and SBA are proactively discussing these options. In order to meet the demand of craft brewers and distillers, New York State will need to increase its malt barley production by 15 times over the next decade, but our malt barley farmers need the high-tech equipment and storage facilities in order to make that goal a reality.”

Schumer continued, “This is an excellent first step, but ultimately we need federal crop insurance for malt barley in order to give farmers the protections they need to grow more of the crop, and I will continue to fight for our Upstate malt barley farmers to obtain the crop insurance they need to really tap into their full potential.”

 

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 and distilling industries. 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 there are many farmers throughout New York State who are beginning to grow this barley, which they then provide to malt houses. These malt houses then 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 and distilling industry has been growing throughout New York State over the past few years, increasing 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, however, the amount of malt barley needed would range from 35-50 pounds. As a result, Schumer explained, 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. In order to do this, they will need the high-tech equipment and facilities in order to increase their production and supply the best product possible.

 

Right now, New York State has approximately 2,000 acres of malt barley, and it is estimated that malt barley production will have to grow fifteen-fold to 30,000 acres in the near term to meet the needs of New York State brewers and distillers. Because of this, Schumer said, New York State farmers will need to drastically increase their production of malt barley over the next decade. As a result, they will need the equipment to do so. Schumer previously called on the USDA and the federal SBA to educate local malt barley farmers on federal financing options that will help them scale up and add equipment and facilities, like on-site barley storage. Currently, many New York State malt houses are small and, while they need the barley, they cannot often accommodate the thousands of tons of grain that these farmers will need to supply at one time. Many farmers across the state have expressed interest in growing malt barley if they had the assurance that malt houses would be able to take the barley seeds as soon as they are harvested. Additionally, other equipment malt houses have expressed interest in adding includes on-site quality control testing facilities. Right now, some Upstate New York malt houses must send the malt barley they receive from farmers to malt labs in Canada and other countries to certify the quality and characteristics of the malt. This takes several weeks, is more costly for a local company, and could lead to production delays for the craft brewers and local distillers that rely on the malt barley to make their product.

 

In addition to these efforts, Schumer vowed to continue pushing to establish a federal crop insurance program for New York State farmers who grow malt barley, which is crucial to the continued growth of the area’s burgeoning craft beer and distilling industries. Schumer explained that there currently is no federally backed insurance coverage for malt barley in New York State, even though farmers in other states do have coverage, which severely hampers the ability of local farmers to grow the amount of malt barley needed to meet the demand of local craft brewers and distillers. Schumer noted that multiple farms across the state are already growing malt barley and providing it to a number of local brewers and distillers, but malt barley needs very specific conditions to grow and severe weather can completely knock out an entire crop. Therefore, Schumer urged the U.S. Department of Agriculture (USDA) to expand its malt barley crop insurance program to include New York State.

 

A copy of Senator Schumer’s initial letter to the USDA appears below:

 

Dear USDA Secretary Vilsack and SBA Administrator Contreras-Sweet,

 

I write to bring your attention to help overcome several barriers that are now inhibiting the growth of a New York State malt barley industry including the current lack of a malt barley crop insurance program and a need to tap existing USDA and SBA financing programs to purchase equipment to scale up New York’s malt barley supply chain.

 

First there is a growing need for the United States Department of Agriculture (USDA) to provide a malt barley crop insurance program in New York State and I ask that USDA prioritize and expeditiously engage with the New York State malt barley industry for the creation of a barley crop insurance product specifically for Malt Barley.  Additionally to help expedite this effort, I ask that the (National Agricultural Statistics Service) NASS begin surveys of New York malt barley production to aid the development of a first-ever insurance available to New York farmers.

 

Although USDA created a national malt barley crop insurance option beginning in the 2011 growing season and federally backed Malt Barley crop insurance options are available in other states, this option is not now offered in New York State in part because Malt Barley was not 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.

 

Right now, according to data from Cornell Cooperative Extension, there are 13 Malt Houses either in operation or planning to open now in New York as well as 39 farms engaged in growing malt barley with an estimated 2000 acres farmed in 2014.  However, it is estimated malt barley production will have to grow fifteen-fold to 30,000 acres in the near term to meet the needs of New York State brewers and distillers.  In particular New York farm brewery licensed brewers will be required to source 60% of their ingredients from New York state farms or producers by 2018 and no less than 90% by 2024.  Additionally this year New York state farm craft distillers are required to source 75% of their ingredients from New York farms or producers.

 

Currently the only barley insurance available in New York 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 offered in other states, is needed in New York 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.

 

Lastly, I ask the USDA and SBA to conduct outreach to the New York malt barley growers and producers to help them access existing financing programs that can help this burgeoning industry scale up and afford needed equipment and facilities that are now out of reach to today’s small but growing malt growers and producers.   For example, there is need for more climate controlled on-site storage to store barley until it can be malted, as well as need for grain cleaning equipment, quality control testing facilities, and other capital needs.

 

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.

 

Sincerely,

 

Charles E. Schumer

United States Senator

 

 

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