Letter to Tom Vilsack, Secretary of the Department of Agriculture, and Maria Contreras-Sweet, Adminstrator of the Small Business Adminstration - Partner with Local Malt Barley Farmers & Malt Houses to Tap Existing Fed Financing For Equipment, Facilities Needed to Ramp Up Malt Supply Chain

Letter

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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