When ordering a beer these days, your choice is no longer just a couple of same-tasting brands from big national or international breweries. North Americans have developed a taste for “craft” beers from an ever-expanding list of smaller breweries. Different beers need different malts, which creates a demand for different varieties of malting barley.
But it can be a challenge for growers to connect with that demand. Large brewers have traditionally taken an “If it ain’t broke, don’t fix it” attitude to buying malt. When they find a variety that works, they like to stick with it. But while it might perform well in a brewery, after a few years an older variety may not perform so well in the field. There may be new varieties that are better agronomically, but growers are reluctant to try them without guarantee of a market.
Metcalfe and Copeland dominate
The Canadian Malting Barley Technical Centre (CMBTC) recently issued its list of recommended varieties for 2016-17, with CDC Copeland and AC Metcalfe once again the highest recommended varieties.
“In a normal year, just under 70 per cent of the malting barley that’s accepted will be one of two varieties, Metcalfe being the biggest and oldest, and Copeland being the second biggest and a bit newer but not very new,” says Allen Kuhlmann, a director with the Saskatchewan Barley Development Commission. “There’s an old, old variety called Harrington and still three or four per cent of the barley grown is Harrington.”
“We hung on to the Harrington variety for years,” says Barley Council of Canada chairman Brian Otto. “There were better varieties out there, but the customers still wanted Harrington barley. We have some customers who still like Metcalfe barley, but there are newer varieties than Metcalfe. Metcalfe’s been out there for a long time.”
Otto says the barley council is working with the industry in an effort to get newer varieties recognized for their benefits and up higher on the demand list, but it’s a slow process.
That said, some customers are looking at varieties such as AAC Synergy becoming the replacement for some of the mainstream Metcalfe market demand, while companies like Anheuser-Busch in the U.S. are replacing Metcalfe with some of their own newer varieties, says Michael Brophy, president and CEO of the Brewing and Malting Barley Research Institute (BMBRI).
“So the change is already actively happening,” Brophy says. “Growers should talk to their local merchant or malting company about these trends and demand opportunities for new varieties in making their related seeding decisions for 2016.”
The recommended list
CMBTC also listed CDC Meredith, Bentley, CDC PolarStar, Newdale and Merit 57 on its two-row variety list, but noted they have limited demand.
CDC Kindersley and Synergy are under commercial market development with “growing demand,” CMBTC says.
“Meredith is considerably better agronomically, and it’s quite new, but (last year) maltsters were paying less money for Meredith by a significant amount than for the other two varieties,” Kuhlmann says. “If you want to promote a new variety, you must not pay a discount, you’ve got to pay the same or better or it isn’t going to happen.”
Farmers, maltsters, brewers and commercial grain companies buying for export need to work together to encourage planting of newer varieties, says Cargill’s North American merchandising manager Lorelle Selinger.
“You can’t integrate it overnight, but obviously we all want to push varieties that are going to yield higher and create better returns for the growers,” she says.
But, like CMBTC and BMBRI, Selinger also recommends growers consult with potential buyers before planting varieties with limited demand.
Bob Sutton, commercial vice-president of Rahr Malting Co., says buyer uptake on new varieties was even worse before the rise of craft brewers.
“If you’re a Labatt’s or Molson’s, you want the same basic malt at all of your plants across Canada,” Sutton says. “With craft brewers, they are much more flexible.”
Chicken and egg
For the big brewers, the traditional problem has been quantity. They can’t gradually accept a new variety because they require a guaranteed large supply. But farmers don’t want to grow without an assured market.
The emergence of craft brewers may help break the impasse.
“Because they are individuals, it can be one or two or three craft brewers in the beginning, and then as the availability of the barley grows, you get more and more acceptance of it. And then when it gets to a large enough scale, then the larger brewers can get into it,” Sutton says. “The opportunity is now better to ramp up the supply gradually rather than having to go from zero to 60 overnight. Nobody was willing to take that risk. Now it’s much easier.”
Seed supply is another challenge for introducing a new variety. The more malt trials conducted on the seed as it’s developed, the less supply there is available for multiplication in subsequent years.
“So you’ve got two things going on at once: you have to multiply the seed so there is a supply available, but you also need to be making malt and getting that to brewers for testing at the same time. It’s an interesting process. But I’d say it’s better now with the advent of the craft brewers than it was when there was basically a duopoly,” Sutton says.
Craft breweries have taken off in Canada over the last 25 years. At last spring’s GrainWorld conference, Selinger said that there were over 4,000 registered craft breweries now versus about 400 in 1990. And whereas the average commercial beer will contain 40 to 50 per cent malt content, a typical craft beer will have 90 to 100 per cent.
“That’s really a bright spot from the perspective of farmers,” says Kuhlmann, adding craft brewers are more open to experimentation and taking new varieties.
But CMBTC managing director Peter Watts points out that compared to the bigger brewing companies, craft brewers have different requirements, such as lower protein and lower enzymatic activity.
Selinger notes craft brewers are more particular about quality too. With the large mainstream brewers, a brewer may never actually physically see the malt. But craft brewers are looking at their malt one bag at a time.
“A craft brewer typically will have his hand in the malt and be chewing it as he’s working with it, and it brings a whole new level of quality determination,” Sutton says.
Current Canadian varieties like Copeland, Meredith and Bentley are already being supplied to the craft brewing industry, adds Brophy.
“Some of the recently registered new Canadian varieties with lower protein and more moderate enzymes are specifically aimed at the needs of the craft sector,” he says. “Other breeding lines at an advanced stage of pre-registration testing are also aimed at satisfying the quality needs of the craft sector.”
Brophy stresses these newer varieties aren’t all the same and have been bred to satisfy different malt and brewing customer specs. Customers looking for higher enzyme may look at Kindersley, while customers seeking moderate to lower enzyme may consider varieties like Bentley.
Greater demand from craft brewers is good news for producers who want to grow newer varieties that offer better yields.
Brophy says new varieties like Bentley and Synergy are 13 per cent to 15 per cent higher yielding than Metcalfe, which itself is seven per cent higher yielding than Harrington.
“So over a 20-year period we have seen our breeders produce about a 20 per cent yield increase in malting barley varieties,” says Brophy, calling it a pretty good performance relative to other crops. “That is why growers want to grow the new varieties, provided there is market demand. I would hope that within the next five years, a couple of the higher-yielding new varieties will supersede Metcalfe, which will in turn drive up overall average barley yields.”
Brophy would also like to see new replacements for Metcalfe get promoted to and be accepted by offshore customers for bulk malting barley, as this also represents a large portion of demand.
More acres would also be good news for buyers who have watched production shrink over the years.
“Supplies are very tight,” says Cargill’s Selinger. “We had a very low carry-in into this crop, and as quality is not spectacular, it’s going to be tight again.”
Although Canadian barley output rose to 8.2 million tonnes in 2015 from 7.1 million a year ago, it’s still well off from when farmers routinely produced double that.
Yield improvements for both malting and feed varieties have lagged other crops. The 2011-15 prairie average yield was 63 bushels per acre, 16.2 per cent higher than the 1991-95 average. For the same periods, spring wheat average yields were up 42 per cent and oats 36.4 per cent.
Otto, however, is optimistic production will grow.
“We’re averaging right now around 6.8 and seven million acres. We have been as high as 14.1 million acres. I think what the industry would be looking for in the near future is to get in around nine to 10 million acres of barley in Western Canada, and I think we can do that,” he says, pointing out barley is cheaper to grow than canola and high-protein durum.
“What we’ve seen in the past two years is malting barley has come out as one of the most best return crops per acre and will be again this year, so that’s driving more seeded area,” adds Watts. “Given that the returns for malting barley continue to be among some of the best of all crops to grow in Western Canada, I think we’ll see malting barley increase again this year. There’s good demand for the malt barley; that’s why prices are good.”