As beer loses share to hard seltzer, US barley farmers scramble

Sharon, North Dakota, Sept 11 (Reuters) - Don Nygaard, a third-generation farmer in a remote corner of North Dakota, used to grow malt barley for Rahr Malting Corporation to make into lagers, pale ales and IPAs.

But this year, he received no lucrative contracts from Minnesota-based Rahr or any beer makers, so his sprawling farm is growing food-grade barley and wheat, both crops that are priced near four-year lows.

As overall beer consumption in the U.S. slides to its lowest level since the 1970s according to data from the Brewers Association, U.S. Plains states face a huge glut of barley. Americans are buying less beer, and frequenting fewer craft breweries that use even more malt per beverage.

The exploding popularity of hard seltzers and lower alcohol consumption in general have led to plummeting barley demand from beer makers. Multiple years of excellent barley crops have further depressed prices and taken away a once high-value option in a year where farmers are struggling to break even with any crops, farmers, agronomists, and beer industry experts said.

"I'm worried with the trends that are happening," Nygaard said. "This winter is going to be tight for all of us trying to figure out which payments we can make."

Rahr, which has a barley procurement facility in Taft, North Dakota, did not respond to request for comment.

The most-recent U.S. crop report showed the number of acres planted with barley have fallen by 22% compared with a year ago. In North Dakota, the No. 2 producing state behind Idaho, acres nearly halved from a year ago. Supplies of barley that farmers have in storage on farms are up 51% from last year and are the highest since 2010, according to the U.S. Department of Agriculture.

U.S. malt barley prices, which farmers arrange before planting, were around $7 per bushel last year and under $5 per bushel this year depending on location, farme...
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