Sen. Jon Tester announced last month he was throwing his support behind the Brewers Excise and Economic Relief Act, a bill aimed at cutting the excise tax on U.S.-brewed beer from $18 per barrel to $9. The measure would also reduce the tax rate for small brewers from $7 per barrel to $3.50. Tester said the effort would help brewers "double-down on their success and strengthen Montana's reputation for great-tasting beer."
Tester's announcement included an estimate from MillerCoors that the BEER Act's tax reduction would "result in a $1.46 million increase in barley sales." Dan Kidd, a director with the National Barley Growers Association, says his industry is "very supportive" of any excise tax reduction that allows domestic brewers to invest more in production.
"Those dollars would find their way back to the farms," he says.
According to the national Beer Institute, the brewing industry's use of barley products nationally has skyrocketed from 2.2 million pounds in 1992 to more than 128 million pounds in 2012. MillerCoors currently contracts with more than 800 barley growers in the Northern Rockies, including about 250 in Montana. In 2011, Anheuser-Busch reported to the Montana Legislature that it contracts with 675 barley growers in Montana alone and purchases $55 million worth of malt barley from the state annually.
Those companies have also invested heavily in their in-state barley infrastructure. MillerCoors was scheduled to complete construction of a 3.2-million-bushel barley elevator in Power last monthits second in the state. The company intends to address expansion of an Idaho-based water conservation pilot project to Montana in its annual sustainability report this year.
"If you look at the last 10 years, it's just a dramatic shift in the amount of barley that everybody's getting out of Montana," Kidd says. "Montana's rapidly becoming the number one player when it comes to malt barley."
The upward trend is further perpetuated by Montana's ongoing craft brewing boom. The Montana Brewers Association states that roughly half of the six million pounds of malted grain used by Montana microbreweries each year comes from in-state. As the industry expands, Kidd says, "they're going to need more barley."
The BEER Act was introduced in the Senate in 2009 and again in 2011, with Tester acting as a co-sponsor both times. Neither attempt made it past committee.