Craft Beer Boom Spurs Demand for Close-to-Home Barley Malt

Small malting businesses have sprung up around the country to serve a growing thirst for locally crafted beer and whiskey that reflect a region's climate and soils.

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(AP) — Dennis Nesel converts barley to malt the way it was done hundreds of years ago, spreading the water-soaked grain on his malt house floor and turning it with a shovel as it germinates to release the sugar needed for fermentation. "This is old-school heritage malting," says Nesel, whose "micro malt house" uses barley from a nearby farm and returns some of it as malt to the farm's craft brewing operation, which turns out small batches of beer sold at farmer's markets and local pubs.

Nesel's Hudson Valley Malt, 100 miles north of New York City, is one of dozens of small malting businesses that have sprung up around the country over the past few years to serve a growing thirst for locally crafted beer and whiskey that reflect a region's climate and soils.

"Wine people call it terroir," Nesel said. "We call it flavor of the field."

According to the U.S. Brewers Association, the number of small-scale craft malting companies in the U.S. has grown from fewer than five in 2010 to 36 today, with about 50 more in the works. That goes along with a rise in craft breweries over the same period, from 1,754 to 3,418.

New York feeds that trend with a 2012 state law that requires farm breweries to use set proportions of state-grown ingredients. About a dozen small malt houses have opened in the state in the past three years to serve some 200 breweries, according to the New York State Brewers Association.

But even without state incentive programs, regional malt houses using locally grown barley have sprung up in Massachusetts, North Carolina, Nevada, Michigan, Colorado and Oregon.

"It was hard at first to find farmers willing to grow malting barley," said Andrea Stanley, whose Valley Malt in Hadley, Massachusetts, was the first craft malt house in the Northeast in 2010. "That has really turned around, with brewers wanting to buy local grain and creating a nice demand."

Proximity Malt, a craft beer-focused startup founded a year ago by former employees of Malteurop, a global malt supplier, is planning malt houses in southern Colorado and Delaware that will produce 50,000 tons of malt a year from locally grown grain.

A development that could spur New York farmers to grow barley on a grander scale is the plan by oil giant Sunoco to open a large-scale malt house later this year in a former Miller Brewing Co. plant in central New York where it already has a corn ethanol plant. The $9.1 million facility will handle 100,000 bushels of malting barley annually to serve mostly craft brewers.

While farmers in the Northeast have long grown barley as a cover crop and for animal feed, the moist climate makes it hard to produce grain of the high quality needed for malting. Wet weather can make the grain germinate before it's even harvested, and fusarium fungus can make it toxic. Barley must be tested for the fusarium toxin before it's used for beer-making.

Cornell University has been doing field trials to find barley varieties best suited to New York, and the new Center for Craft Food and Beverage at Hartwick College in Oneonta is providing farmers technical support, education and quality testing.

Ted Hawley, who began production at New York Craft Malt on his fourth-generation family farm in Batavia in 2014, does his malting in stainless steel vessels that he made himself. He said four farmers in his area of western New York were unsuccessful in their attempts to grow malting barley. For those who succeed, the reward is up to $7 a bushel for quality malting barley versus $3 for animal feed.

About 2,000 acres of malting barley was grown in New York last year, up from 500 acres in 2012, according to the state Farm Bureau. That's expected to increase considerably to meet the growing demand of the craft brewing industry.

Ken Migliorelli, who owns the fruit and vegetable farm where From The Ground brewery is located, said his well-draining sandy soil is ideal for growing malting barley. He's supplying about a dozen breweries now and plans to expand from 100 acres of barley to 500. "I was growing barley as a cover crop in my vegetables before," Migliorelli said. "Now, I'm getting some revenue from it."

Jakob Cerill, who started From The Ground brewery about a year ago on the farm that provides Nesel's barley, said using grain from nearby fields and having it malted in Nesel's converted horse barn three miles away imparts a special freshness to his beer.

"There's a great flavor," he said. "It's sort of like eating a cookie from your oven versus one from the grocery store."