Malting House Spurs Growth for Value-Added Crops

Des Keller, Contributing Editor

In a field of barley swaying in a spring breeze near Shelby, North Carolina, Steve Greene is asked if he foresaw how their operation has evolved -- how it recently came to grow small grains destined to become a prime ingredient for beer and distilled spirits in the region.

His answer is quick and emphatic: "I wouldn't have predicted anything that's happened in the last 10 years," says Greene, who co-owns and operates ASR Grain with his cousin, Andrew White, and uncles Randall and Phillip Greene. "Ten years ago, we were running a 225-head dairy and using a two-row planter," he says.

White adds, "Now, we operate a grain elevator serving 220 farms, farm 4,000 acres ourselves and grow specialty crops." Gone is the dairy, something their family started in 1948 and dissolved in 2015. "We eventually realized with the dairy we had to either go bigger or go home," Greene says.

LOCALIZE SUPPLY CHAIN

Part of the shift in business for ASR Grain -- now in its seventh generation -- can be attributed to Riverbend Malt House, 70 minutes away in the mountain tourist mecca of Asheville. It's here that Brent Manning shows us around the company he founded 13 years ago with Brian Simpson that takes grain -- barley, rye, oats, corn and wheat -- and malts it for use by regional brewing and distilling businesses.

"We didn't want to be just another brewery in the city (at the time, Asheville had 13 breweries; there are now 40 in the area)," Manning says. "We wondered what we could do to localize the supply chain and connect farmers to this billion-dollar industry."

Most barley used for malting in the U.S. is grown in the Northwest, from the Dakotas to Washington. Manning and Simpson wanted to carve out a slice of that business for brewers and distillers in the Southeast. They needed growers.

RECRUITING FARMERS

Malted grain is germinated using moisture, and then the process is halted by drying. Malting causes enzymes to develop in the grain -- enzymes required to modify the grains' starches into various types of sugar. The modifications are crucial to the character and flavor of the resulting beverage.

ASR Grain had expertise growing small grains such as barley -- after all, the family ran a dairy for nearly 70 years. They had also increased their storage capacity and, today, have more than 500,000 bushels available at their main location. ASR's ability to store grain is important, as Riverbend has little available onsite beyond its most immediate needs.

Riverbend now works with several dozen growers from the Carolinas, Kentucky, Virginia and even Florida. The first few growers Manning and Simpson tracked down with the help of state Extension services. "Farmers are very enterprising and always looking for new markets," he explains. "After our name got out, farmers started finding us."

Riverbend's existence helped jump-start an effort in southwest Virginia to promote the growing of specialty crops like barley, rye, oats, wheat and corn for brewing and distilling. The public-private entity, Appalachian Grains, is the result of brainstorming begun by Virginia's Department of Mines, Minerals and Energy to spur economic development in a former coal-mining region. Appalachian Grains hopes to build a grain terminal to clean and store those crops by the end of 2025.

"Until there is a grain terminal in the area, it isn't economically feasible for individual farmers to deliver the grain 300 miles away in Indiana," says Will Payne, managing partner of Coalfield Strategies LLC, the entity in Virginia using federal grant money for Appalachian Grains. "That's the closest facility that can clean and condition the grain before delivery to a malting facility like Riverbend," he adds. The grain terminal is expected to cost more than $2.5 million.

STARTING SLOW

In the meantime, growers are getting experience with new grains -- or new versions of grains they already grew. Seth Haynes planted 15 acres of two-rowed barley in 2020 to 2023 destined for Riverbend. In addition to selling the grain for a premium, he also harvests 100 small square bales of barley straw per acre, a yield 25% better than wheat straw.

Haynes isn't growing barley for malting this year. A combination of bad weather and higher-than-expected protein levels in his barley caused it to be rejected by the malting facility. He fully expects to grow the crop again in 2025.

"The toughest part is growing the right quality required by the brewers," Haynes says. "And, some of that is something you can do something about, but a lot of it is up to the good Lord, rain and the growing season."

The same can be said for ASR Grain in North Carolina. Like the Virginia growers, ASR's total acreage of grains to be malted isn't large. They've planted about 150 acres of barley and 50 acres of oats since 2021. White says they plant the barley about Oct. 15 and try to harvest June 1.

VALUE-ADDED SPECIFICATIONS

If the acreages thus far aren't large, the premiums can be. ASR's White says they are paid $7 to $8 per bushel for barley and $8 to $9 per bushel for oats. Barley grown for livestock feed is worth $4 to $4.50 per bushel, he says. Oats grown for feed would bring $4 to $5 per bushel.

Both the barley and oats are handled at food-grade standard: crops destined for human consumption. The biggest concern, he explains, is watching for any vomitoxin levels in the grain. They also need to monitor protein levels in the growing crop for possible in-season nitrogen applications.

Beer brewers generally use two-rowed barley rather than six-rowed for its lower protein content. While the plant needs nitrogen for good growth, too much can increase protein content beyond the optimum. So, they monitor the plant and add nitrogen only when necessary in a secondary application.

ASR's barley yields have been as high as 70 bushels per acre. White credits advances in breeding programs at Virginia Tech and North Carolina State University for developing varieties that can better handle Southern heat and heavier rainfalls. An added bonus, White says, is their soybean yields double-cropped after barley are better than those after wheat.

In the brewing and distilling world, both two-rowed and six-rowed barleys are used, though beer makers tend to use more two-rowed barley, while distillers prefer six-rowed. "The distillers I've worked with almost exclusively want six-row due to the enzymatic action to start the enzyme conversion process," explains Drew Carter, one of the Virginia growers with specialty grain experience.

As the name suggests, two-rowed barley has two lines of grain when viewed along the axis of the stem. Six-rowed barley has six rows running around the stem. Six-rowed has more protein and enzyme content than two-rowed malted barley, and contains fewer grams of carbohydrate. Brewers say two-rowed malt has a fuller, maltier flavor, while six-rowed malt produces a grainier flavor in finished beer.

To the same extent, the status quo on whether to use two-rowed or six-rowed barley for brewing has changed, in part because of breeding efforts that have increased the durability of barley grown in the South and Southeast. Riverbend Malt House is moving to use two-rowed malt barley exclusively based on the ability of new two-rowed varieties' ability to grow well -- and yield better -- in the South. Previously, a grower such as Seth Haynes could yield 100 bushels per acre with six-rowed and might get 70 to 80 bushels per acre with a two-rowed.

Research from Virginia Tech's Small Grains Breeding and Genetics Program produced the six-rowed Thoroughbred feed variety barley 20 years ago. Fortunately, Thoroughbred also had good qualities for malting grain and became adapted by a number of brewers and malt houses. Then, in 2020, Virginia Tech introduced Avalon, a two-rowed barley specifically bred for malting that involved crosses with Thoroughbred.

"One of our goals is to produce two-use varieties," says Nicholas Santantonio, director of the Virginia Tech program, "that can work agronomically as livestock feed or, if handled properly, will be acceptable or even better as high-quality malt."

HANDLE WITH CARE

In one large room at Riverbend Malt House, Manning demonstrates how they still use a large, three-pronged rake to hand-turn, twice a day, a several-inch-deep layer of barley on a concrete floor. This is germination, old-school-style, even though the company also has large drums that use moisture and heat to spur germination mechanically.

Some brewers, when making certain beers, like the character of the resulting beverage when the grain is germinated by hand. Either way, the barley Riverbend receives will ideally have 12% or less protein, and at least 90% (hopefully closer to 95%) of the grains should germinate when processed.

In the overall scheme of things, Riverbend would not be considered a large malting house even though it has provided products to 300 breweries and distillers to date. The main grain for Riverbend is barley, but it also malts oats, rye, wheat and commodity corn, as well as heritage varieties such as Bloody Butcher corn grain.

If there's a caveat Manning offers, it's that while the premiums are attention-grabbing, there is still way more small grain under cultivation in general than the malting industry can use. "This is definitely not come one, come all," he says. "But for sure there are opportunities."

White, at ARS Grain, says he believes their ability to store barley and oats for Riverbend and their experience growing these crops helps them. "We like that relationship. And, I enjoy seeing the finished product at our own local brewery. I enjoy a good beer."

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