https://www.Businesshala.ca/radio/costofliving/taxing-the-rich-where-has-it-happened-and-why-1.6189413/this-year-s-extreme-drought-could-mean-higher-beer-prices-1.6203372

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

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But this summer, the 61-year-old farmer joked that he could name each plant on his property near Strathmore, Alta., about 55 kilometers east of Calgary, as a severe drought scorched much of Canada. And that could be bad news for beer drinkers.

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“You can see that the harvest is very sparse,” he said. the cost of living Senior Producer Jennifer Keene. “That’s when the crop becomes so stressed, as it was during that heavy summer dome.”

Like canola, barley is a cool season crop that benefits from the high altitude of the prairie, with cool evenings and summer temperatures that rarely exceed 30 C. Many days this summer were hot in the region, and some exceeding 35 C, he said.

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This was disastrous for Hilton’s barley crop, which he expects to be about a quarter of the normal amount.

“What we are hearing from barley organizations and the barley farmers themselves is that this is ultimately going to affect the supply of barley that is available to maltsters, and as a result, the supply of malted barley that is available to Canadian brewers,” Said Luke Chapman, vice president of federal affairs for Beer Canada, an industry association representing approximately 55 Canadian brewing companies.

He noted that Statistics Canada Recently released crop estimates This shows that the production of barley is estimated to be lower by about 27 percent as compared to 2020.

“And as we know, when supply runs low, the price is likely to rise, which will ultimately impact beer prices across Canada next year.”

Chapman said crop failures, along with rising aluminum prices and ever-increasing federal beverage taxes, are all driving up the price of a can of beer. He notes that Beer Canada’s calculations show that there is already a form of federal or provincial tax “about 50 percent of the retail price of beer nationally.”

At his Strathmore Farms, Hilton can see how a barley shortage will exacerbate these challenges. He typically sells his barley for about $6, or $7 a bushel – the price has risen to $10 this year.

He knows very well what this means for beer makers. About four years ago, he started a craft brewery called Origin Malting & Brewing, which uses barley from his own farms. The slogan of their operation is “We Grow Beer.”

‘This is what makes beer beer’

General Manager Chris Hooper is in charge of brewing at Origin, overseeing the production of its pilsners, IPAs – even a passionfruit and blood orange sour.

He added that malted barley—which is submerged in water so it germinates, allowing the fermentation process to occur—is “fundamental” to what it does. “This is what makes beer beer.”

The farm-to-origin relationship, Hooper said, means it may have a smaller crop selection, plus it has some malted barley in reserve, so it should stay on track with no impact on the flavor profile of its beer. .

“So if I was at another brewery and I was buying…malt out on the open market, you are probably going to see a significant change in both the amount available and the quality of that product,” he said.

This is because extreme drought conditions mean not only less barley, but less good quality barley.

“And that means a lot of people have to adjust recipes and kind of change depending on how they’re done because you’re not going to get much alcohol out of a single pound or kilogram of malt,” Hooper said.

Andrew Bullied, director of brewing operations at the Annex Ales Project, a brewery and taproom in Calgary, said he’s never dealt with anything like this year’s heat wave and drought.

“This year is the first time I’ve been asked to sign a contract for a secure supply of barley. It’s always been a commodity that’s been there because it’s grown here.”

Actually this is usually the case. Chapman said Canadian beer makers buy about 350,000 tons of barley each year from Canadian farmers, most of which are from Alberta and Saskatchewan. But the fields in both the provinces were badly affected by the drought.

John Pomeroy, Canada Research Chair in Water Resources and Climate Change and professor at the University of Saskatchewan in Regina, told businesshala in August that the drought could be the worst ever recorded in Canada.

look | This summer’s drought was the worst in Canadian history:

pandemic fallout

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

When bars and restaurants closed, beer usually sold in kegs had to be packaged for retail sale.

“I think it’s 25 or 30 percent of our volume that goes into kegs, and then when you lose it overnight, everything you sell goes into cans,” he said.

“And if that’s true for every single brewery, then yes, it really puts a huge pressure on how many cans are produced in the world.”

In Beer Canada, Luke Chapman noted that the resulting aluminum price increase has unfortunately clashed with both barley shortages and a rising federal beverage alcohol tax, Increase again on 1st April 2022.

“So it looks like there’s a storm brewing here that’s going to eventually have a consequential impact on the prices that Canadians look for beer over the next few years.”


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

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