Schumer: Craft Brewing Is On The Rise In Central NY, But Brewers Need Access To Locally Grown Malt Barley For Industry To Thrive; Local Farmers Hesitant To Grow Crop Due To Lack Of Fed Insurance -- Schumer pushes Feds To Establish Essential Crop Insurance For Central NY Malt Barley Farmers

Press Release

Standing at Empire Farmstead Brewery in Madison County, U.S. Senator Charles E. Schumer today pushed the U.S. Department of Agriculture (USDA) to establish a crop insurance program for Central New York farmers who grow malt barley, a crop that is crucial to the continued growth of the area's burgeoning craft beer industry. 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. Schumer noted that multiple farms and farmstead breweries in Central New York, like Empire, are already growing malt barley to meet local demand, but malt barley needs very specific conditions to grow and severe weather can completely knock out an entire crop. Therefore, Schumer is urging the USDA to expand its malt barley crop insurance program to include New York State. Schumer said that with a number of farm breweries already open and operating in Central New York, it is essential to make sure the malt barley crop can thrive locally.

"Breweries and distilleries throughout the Central New York region pour local products and jobs into our economy, which is why it is important we continue to support this industry and provide them with the tools needed to succeed. In order for local craft brewers to expand right here in Central New York and beyond, we need a strong local malt barley industry, since the crop is so important to the production of beer and spirits," said Schumer. "But the lack of insurance for malt barley is preventing farmers from planting this crucial crop. Without protections, the risk is just too high, and that is preventing our craft breweries from really taking off. In order to meet the demand of craft brewers, New York State will need to increase its malt barley production by 15 times, but malt barley farmers need crop insurance to meet that goal. That is why I am calling on the USDA to bring the national malt barley crop insurance program to New York State. It is already available in other states and for other types of barley; it is time to make it available here in order for our farmers, distillers and brewers 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 multiple Central New York farmers and farmstead breweries, like Empire, are beginning to grow this barley, which they then often 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 industry has been growing throughout New York State over the past few years, and in the Central New York, 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.

Schumer said that this is 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 Brewery are required to be grown or produced in New York State. However, by 2018, 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 (2018) 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.

Right now, New York State has approximately 2,000 acres of malt barley, some of which is grown in the Central New York region. According to data from Cornell Cooperative Extension, there are 13 Malt Houses either in operation or planning to open in New York as well as 39 farms engaged in growing malt barley, with an estimated 2,000 acres farmed as of 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, including many that have begun to take hold in Central New York. Schumer said that, with a number of farm craft breweries already open in Central New York--like Empire Farmstead Brewery--and likely more on the way, as well as an ever-growing farm brewing industry, it is essential to make sure the malt barley crop can thrive locally. Schumer said the region is starting to become a hub for farm brewing, and these new breweries have the potential to be a major boon to the economy.

Because of this, Schumer said, New York State farmers will need to drastically increase their production of malt barley over the next decade. However, the lack of a federally backed crop insurance program is a barrier that is inhibiting farmers and farmstead brewers from producing the malt barley that is needed to support the burgeoning local distillery and craft beer industry. Without the assurance that the malt barley will be insured in the event of severe weather or a poor crop year, many farmers cannot afford to produce a risky ingredient and experience a major loss without adequate coverage. This increased risk and cost scares off many potential growers. Schumer explained that while there is some insurance available to barley farmers, it is only available at the level of animal feed quality. However, the barley that is used to feed animals requires far fewer highly controlled conditions and it is two to three times cheaper to grow than the malt barley used to brew beer and make alcohol. Therefore, many farmers and farmstead brewers must choose between utilizing inadequate insurance that will not cover the full cost of their malt barley crop, or simply forgoing coverage altogether.

Schumer said this situation could be mitigated by providing these farmers with the USDA malt barley federal crop insurance that is offered to farmers in other states. Right now, the national malt barley crop insurance program, which has been available since the 2011 crop season, is not available in New York. Therefore Schumer is calling on the USDA to include New York State in this program and expeditiously approve its incorporation into the national program. Schumer said incorporation into this program would help farmers already producing malt barley as well as entice other farmers and farmstead brewers to produce this product, since they would be less worried about the potential loss they could suffer due to a lack of insurance. Schumer said Empire Farmstead Brewery's goal is to produce beer that is made with 100 percent New York grown hops and barley. In 2014, the brewery grew 11 acres of malt barley and plans to continue to perfect and expand that capacity. However, the production of the malt barley must be made worthwhile for new producers and those looking to break into the industry. Having crop insurance, Schumer said, would provide this much-needed certainty.

In order to begin this process of including New York in the USDA's national malt barley insurance program, the federal agency would need to conduct surveys and inventories to gather information on the varieties of malt barley that are being grown and how the barley is graded; it would also need to assess the average malt barley pricing based on contracts farmers have with malt houses. Schumer is urging the USDA to come in right away and fast track the development of a malt barley insurance program for New York, because these farmers will need time to ramp up production and the malt houses they provide the crop to will need the time and financing to purchase the additional equipment needed to successfully produce at higher levels. This all must be done now rather than later, Schumer said, if Central New York and Upstate New York breweries and distilleries are to have the malt barley supply to fill their demand and the production needed to meet the 90 percent local ingredient requirement in just 10 years.

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