Despite A Wrecked Barley Crop, Idaho Craft Brewer Won't Raise Prices

Oct 7, 2014

Grand Teton Brewing Company says it has a contract for guaranteed malted barley through 2015.
Credit Marissa Anderson / Flickr Creative Commons

The Idaho Barley Commission estimates about 40 percent of this year's barley crop was damaged by rain, but that bad crop is unlikely to affect craft beer prices in the near term. Rain-saturated barley crops in other top producing states like Montana and North Dakota haven't fared much better.

Maltsters are warning brewers that barley will be available but pricey in 2015 when this year’s crop becomes next year’s beer ingredient.

“We’ve been told to expect major price increases for malt,” said Tim Mohr of Angry Hank’s Brewery in Billings. “There is no panic yet. Everybody has been telling us not to panic. There is carry-over from last year’s malt supply. Our prices are stable until January, but beer prices are going up.” - The Billings Gazette

Grand Teton Brewing Company's Rob Mullin says his brewery is the biggest producer of beer in Idaho, making about 140,000 cases of beer each year.

Ninety percent of the malt he uses is grown in southeastern Idaho and processed in Pocatello. But Mullin doesn't take on the risk if a crop fails. His company contracts its malted barley from a middle-man called a "maltster". It's that person who takes on all the risk.

"If he can't supply all the malt that he's promised to his customers from local sources, then he'll go out on the world market and buy barley in order to fulfill my contract," says Mullin. "And he'll probably end up paying more for that. But he's the one that has to take on that risk."

Mullin adds most craft brewers are locked in contracts with maltsters that set the price of barley months before harvest.

Mullin says there's so much competition in the craft brew market right now, that he believes breweries would eat the cost of a bad year for barley, rather than pass them on to consumers.

"There's so many new breweries, there's so much more competition for shelf space and also for tap handles in bars, that none of us want to be the first guy in Idaho to go up over $10 a six-pack," says Mullin.

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