Using Market Access Program (MAP) funds, the U.S. Grains Council’s Beijing office initiated a program in 2019 to promote U.S. barley malt, which almost immediately yielded new sales and set the stage for wider market development efforts for both barley malt and barley when a long-awaited export protocol for U.S. barley was approved as part of the U.S.-China Phase One deal.
The Council’s efforts in barley and malting barley promotion in China were stymied for many years due to the lack of a government-to-government agreement on an import protocol. However, in 2019, the Council began promoting U.S. barley malt exports based on the realization that China’s nascent but rapidly growing craft beer industry was generating demand for malt. The idea was to build relationships with the craft beer industry early on that would create an opportunity for U.S. malt exports as the craft industry took off.
The barley malt program brought several prominent craft brewers from China to the United States to better understand U.S. malt quality and the barley industry overall. This program was intended to build demand for U.S. malt over time as China’s craft beer industry grows. China imports roughly 9 TMT to 13 TMT of barley malt/year, mostly from Australia, Europe and Canada, and the Council is seeking to capture a 10 percent market share, or roughly 1,000 MT, within three years.
On that team was a representative of a beer ingredient supply company that ended up importing 50 metric tons of U.S. barley malt, valued at roughly $75,000. MAP expenditures on the team in 2019 were around $55,000. The malt importer/supplier also provided the Council with contacts in China’s malting industry.
These contacts proved additionally useful after the U.S. and China agreed on a protocol to export U.S. barley to China in May 2020. The effort to establish a phytosanitary protocol for U.S. barley exports to China had been ongoing for several years and was driven by a coalition of barley-producer organizations, the Council, the U.S. Department of Agriculture (USDA), Foreign Agricultural Service (FAS) and the Animal and Plant Health Inspection Service (APHIS). The Council saw the Phase One negotiations as an ideal way to have the barley protocol with China pushed to the finish line and encouraged it to be part of the final package negotiated in late 2019 and signed in early 2020.
Because the Council’s staff had already been working with brewers and other stakeholders in China’s malting industry, they were able to quickly develop programming for U.S. barley once the protocol was established. On June 15, 2020, the Council held its first barley export promotion event by webinar for 80 participants in China, which included a presentation on the U.S. barley industry and a panel of barley exporters and importers from both the feed and malting industry. Interest in U.S. barley was boosted by China’s imposition of roughly 80 percent anti-dumping duties on imports of Australian barley, which has been China’s biggest supplier in the last several years.
China has the world’s largest feed industry and beer industry, and with limited capacity to expand domestic barley production, the demand for imported barley is very high. China’s barley imports in recent years vary considerably, between 5 MMT to 10 MMT, depending on how much is used for feed. Working with both the feed and malting industries in China, the Council plans to generate not only strong barley exports to China this and next year (goal is 100,000 MT/year, valued at roughly $20 million), but also develop strong buyer-seller relationships for U.S. barley to provide the confidence and reliability required to induce U.S. farmers to expand barley
acreage in future years. If this occurs, and U.S. barley exportable supplies expand to meet demand in China, the potential market could be several million metric tons per year.
Through MAP funds and working in coordination with USDA, the Council has successfully cracked open a new market for the U.S. barley industry that could bring long-term growth to this U.S. agricultural sector. With the protocol in place, the Council will expand its marketing programs in China in the years to come.
About The U.S. Grains Council
The U.S. Grains Council develops export markets for U.S. barley, corn, sorghum and related products including distiller’s dried grains with solubles (DDGS) and ethanol. With full-time presence in 28 locations, the Council operates programs in more than 50 countries and the European Union. The Council believes exports are vital to global economic development and to U.S. agriculture’s profitability. Detailed information about the Council and its programs is online at www.grains.org.