WHAT: A yearlong effort led by a Colorado State University team to determine the economic viability of growing high-quality, two-row pale barley and wheat in the San Luis Valley; build and operate a small-scale, environmentally responsible micromalting plant near growers; and sell malt at competitive prices to Colorado’s microbreweries, particularly the 30 largest.
WHERE: Research and coordination have been conducted at Colorado State in Fort Collins, and on-site in the San Luis Valley of south-central Colorado. A final presentation was made to brewers, growers and potential investors during the Colorado Brewer’s Festival June 27-28 in Fort Collins.
WHY (Part I): Malt (germinated and roasted grain) is mixed with yeast, water and hops to make beer and ale. It is crucial to the taste and flavor of beer. Colorado’s microbrewers produce about 250,000 barrels annually. Most microbrewed beer or ale starts with between 60 and 80 percent two-row pale barley malt; wheat beers add that grain in the form of wheat malt in addition. Colorado brewers thus use some 12.5 million pounds (6,250 tons) of malt annually.
San Luis Valley growers offer irrigated, consistently high-quality barley and wheat for beermaking. A micromalting plant (producing about 6,600 tons of malt annually) in the valley could build on the region’s economic base and provide malt less expensively than West Coast and Canadian suppliers, whose product costs include approximately 35 percent for transportation. Colorado microbrewers could gain access to high-quality malt at very competitive costs.
Initial estimates prepared by Colorado State suggest a return on investment for the plant, estimated to cost $5 million dollars, would average 10-15 percent over the plant’s 20-year life.
WHY (Part II): Brewing raw materials grown in the San Luis Valley, malted in the San Luis Valley and used by Colorado microbrewers would keep money in the state.
Using an economic multiplier of two, a conservative estimate of additonal funding the project would put into circulation, suggests $5 million would be added to the state’s economy in addition to the $5 million expenditure for the plant. A majority of that money will remain in the San Luis Valley, broadening the area’s agriculture-based economy.
WHO: The project involved an interdisciplinary team of experts from Colorado State University, representatives of Colorado’s microbreweries and officials from various governmental and non-governmental agencies.
Colorado State participants:
- Lee Gray, chair of Colorado State’s agricultural and resource economics department; Dawn Thilmany, assistant professor; Eric Scorsone, doctoral student and economist, Office of State Planning and Budget; and other departmental faculty;
- Duane Johnson, associate professor of soil and crop sciences, who helped advise growers on barley and wheat strains;
- Lee Sommers, director of Colorado Agricultural Experiment Station; and
- Merle Dillon, a small crops specialist with Colorado State University Cooperative Extension in the San Luis Valley.
Steering committee of Colorado microbrewers:
- Phil Benstein, New Belgium Brewing Co., Fort Collins;
- Doug Odell of Odell’s Brewing Co., Fort Collins;
- Todd Usry of Breckenridge Brewing Co., Breckenridge;
- Eric Warner of Broadway Brewing Co., Denver; and
- David Zuckerman of Rockies Brewing Co., Boulder.
Representatives of governmental and other organizations advising on the project:
- David Edgar, director, Institute of Brewing Studies, Boulder;
- Dale Edwards, Colorado State Cooperative Extension southwest region director;
- Roland Mower, Fort Collins Economic Development Corp.; and
- Jim Rubingh, Markets/Colorado Agriculture.