As global malt supplies tighten, many overseas breweries search for ways to manage their price risks when purchasing malt. As a result, some breweries have shown an increased interest in malting barley production contracts with U.S. producers. The Cerveceria Nacional Dominicana (CND) Brewery from the Dominican Republic is one such company.

CND approached the U.S. Grains Council for assistance in exploring the possibility of starting a program for contractual production of malting barley with U.S. producers; hoping that such a program would help the brewery better manage production costs. Recognizing the opportunity to strengthen the relationship between CND and U.S. barley farmers, particularly in light of a competitive malt market, the Council organized a visit by CND representatives to the United States last week. With cooperation from the North Dakota Barley Council (NDBC) and the Montana Wheat and Barley Committee, the U.S. Grains Council hosted three CND representatives who met with barley farmers.

“CND was in North Dakota seeking factual information on how the U.S. barley supply chain operates in their effort to further assess the potential for utilization of North Dakota barley,� said Jim Broten, NDBC chairman. Broten and Steve Edwardson, NDBC executive administrator, provided the visiting team with an overview of barley production and price trends in the state and outlined how farmers select crop enterprises. Such discussions were aimed at helping CND better predict what its future malt supply out of the United States may look like.

“It’s important for them to understand that farming is a business and that barley must compete for acreage with other crop enterprises,� Broten said.

While in North Dakota, CND representatives also visited Broten’s farming operation where they evaluated barley in the field and gained a better understanding of barley enterprise management at the farm level.

CND currently uses 44,000 metric tons (1.7 million bushels) of malting barley annually, primarily from the United States, and has expressed an interest in contracting between 20 and 40 percent of their malting barley needs with U.S. producers. The company operates two breweries and produces the Dominican Republic’s leading beer brand, Presidente, which holds more than 95 percent of the country’s market share.

Edwardson said the team expressed their gratitude to both Montana and North Dakota barley growers for helping them gain a deeper understanding and appreciation for the vital role U.S. barley producers have in ensuring they get the best barley possible.

Written by Jodi Kiely, USGC Contributing Writer