Extreme drought this year could push beer prices up



When Spencer Hilton stands in one of his farm fields in southern Alberta at this time of year, the remains of his barley crop usually reach his knees.

But this summer, the 61-year-old farmer joked that he could have named each of the plants on his property near Strathmore, Alta., About 55 kilometers east of Calgary, due to the severe drought that ravaged most of western Canada. And that could be bad news for beer drinkers.

“You can see the harvest is very sparse,” he said. Cost of life senior producer Jennifer Keene. “This is what happens when the harvest is so stressed, as it was during this huge dome of heat.”

Like canola, barley is a cool-weather crop that takes advantage of the high elevation of the prairie, with cool evenings and summer temperatures rarely exceeding 30 ° C. This summer the region has seen many warmer days than that, and some over 35C, he said.

This has been devastating for Hilton’s barley crop, which is expected to be about a quarter of its normal volume.

Spencer Hilton in August 2020, when the barley stretched above his knees. This year, his barley crop in Strathmore, Alta. Was ravaged by extreme drought. (Submitted by Spencer Hilton)

“What we are hearing from barley organizations and the barley growers themselves is that this will eventually affect the supply of barley available to maltsters and, therefore, the supply of malting barley. available to Canadian brewers, ”said Luke Chapman, vice president of federal affairs at Beer Canada, an industry association representing approximately 55 Canadian breweries.

He notes that Statistics Canada recently released crop estimates which show barley production is estimated to be down about 27 percent from 2020.

“And as we know, when the supply goes down, the price is likely to go up, which will likely impact beer prices across Canada over the next year or so.”

The Hilton farm in August 2020 when the barley crop was healthy. (Michael Trudeau Photography)

Chapman said poor harvests, coupled with rising aluminum prices and steadily rising federal beverage taxes, all drive up the cost of a can of beer. He notes that Beer Canada’s calculations show that already “about 50 percent of the retail price of beer nationwide is some form of federal or provincial tax.”

On his Strathmore farm, Hilton can see how the barley shortage will add to these challenges. Normally he sells his barley for about $ 6 or $ 7 a bushel – this year the price has risen to $ 10.

He knows intimately what this means for brewers. About four years ago, he started a craft brewery called Origin Malting and Brewing, which uses barley from his own fields. The slogan of its operation is “We grow beer”.

“This is what makes beer beer”

General Manager Chris Hooper is the Brewing Manager at Origin, overseeing the production of its pilsners, IPA – even a passion fruit and blood orange sour.

Origin Malting and Brewing chief executive Chris Hooper said most breweries would feel the effects of higher prices for malting barley. (Submitted by Chris Hooper)

He said malt barley – which has been submerged in water to germinate, allowing the fermentation process to occur – is “fundamental” to what it does. “That’s what makes beer beer.”

Origin’s relationship with the farm means it can have a choice of the small crop, and has some malted barley in reserve, Hooper said, so it should stay on track with no effect on the farm. the flavor profiles of its beers.

“So if I was another brewery and bought… malt on the open market, you’re probably going to see a significant change in both the quantity available and the quality of this product,” he said. he declares.

This is because the extreme drought conditions mean not only that there is less barley for everyone, but also less good quality barley.

“And that means a lot of people are going to have to adjust the recipes and sort of change the way they do things because you won’t get that much alcohol from the same pound or kilogram of malt,” Hooper said. .

Andrew Bullied, director of brewing operations at Annex Ales Project, a brewery and bar in Calgary, said he had never had anything to do like this year’s heat wave and drought.

“This year is the first time I have been asked to sign a contract to secure the supply of barley. It has always been a commodity that exists because it is grown here.”

Indeed this is normally the case. Canadian brewers buy about 350,000 tonnes of barley from Canadian farmers each year, most in Alberta and Saskatchewan, Chapman said. But farms in both provinces have been hit hard by the drought.

John Pomeroy, Canada Research Chair in Water Resources and Climate Change and professor at the University of Saskatchewan in Regina, told CBC in August that the drought could become the worst on record in Canada.

WATCH | This summer’s drought was one of the worst in Canadian history:

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Pandemic fallout

But the barley shortage isn’t the only thing driving up the cost of making beer.

When bars and restaurants closed, beer that would normally be sold in barrels had to be packaged for retail sale instead.

“I think it’s like 25 or 30 percent of our volume comes out in drums, and then when you lose that overnight, everything you sell has to go in cans,” he said. declared.

Luke Chapman of Beer Canada says poor harvests, coupled with rising aluminum prices and steadily rising federal beverage taxes, all drive up the cost of a can of beer. (Chris Young / Canadian Press)

“And if this is true for every brewery, then yes, it puts a huge strain on the number of cans produced around the world.”

At Beer Canada, Luke Chapman said that the resulting increase in the price of aluminum has unfortunately come up against both the barley shortage and the increase in federal taxes on alcoholic beverages, which are expected. increase again on April 1, 2022.

“So it looks like there is some sort of brewing storm here that will eventually have a big impact on the prices Canadians see for beer over the next couple of years.”

Written by Brandie Weikle with files from CBC Saskatchewan. Produced by Jennifer Keene.


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