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Why U.S. Barley Farmers Are Under Pressure as Beer Loses Ground

U.S. barley growers depend heavily on malt buyers, so weaker beer demand can matter. But oversupply also pressured the market, and USDA’s later figures do not prove hard seltzer caused the strain.
From TheFinanceBase Team4 min to read
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U.S. barley growers are facing pressure from both sides of the market: weaker beer demand can reduce demand for malt barley, while abundant crops can weigh on prices. Hard seltzer is part of the competition for drinkers—but it is not the only cause, and the available reporting does not quantify its effect on barley demand.

Why does beer demand matter to barley farmers?

Most barley grown for malting goes into the malting industry, which supplies breweries. North Dakota State University crop economist Frayne Olson told Reuters in September 2024 that “the vast majority of what they grow goes into the malting industry, so beer consumption makes a big difference.” When breweries cut production or buy less malt, growers can lose an important market or contract opportunity.

That exposure matters to farm finances because a crop’s profitability depends not just on how much is harvested, but on whether buyers want it and what they will pay. Olson described the loss of a marketing option as significant: “To lose one of your tools to make profit is huge. The farmers are absolutely concerned.” These comments reflect conditions reported in 2024, not a current measure of individual farm finances.

Is hard seltzer replacing beer—and does it use barley?

Reuters’ September 2024 account described hard seltzers and other drinks as competitors for beer. Brewers Association chief economist Bart Watson said, “Beer is the biggest loser,” adding that “there’s so much competition from products that didn’t exist 50 years ago.” The report did not isolate hard seltzer’s contribution to declining beer demand or quantify how much it changed barley purchases.

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Nor is every hard seltzer made the same way. Reuters reported that many of the popular brands it named use fermented sugar, vodka, or tequila rather than barley. It also noted that some seltzers and non-alcoholic beers use malt barley. The relevant financial link is that drinks made without beer malt can compete for customers without generating the same barley demand—not that all alternative beverages are barley-free.

Why oversupply can hurt growers even as acreage falls

Demand is only half the market story. Reuters reported that multiple strong barley crops had contributed to oversupply and weak prices. When supply is plentiful relative to buyers’ needs, growers may face weaker pricing even if they have planted fewer acres more recently. The 2024 reporting also described high borrowing and input costs as pressures on farmers at that time; it does not establish that those costs or financing conditions remain the same in 2026.

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The September 11, 2024 Reuters report said U.S. planted barley acreage was down 22% year over year while on-farm stocks were up 51%, based on the then-most-recent crop report. Those are historical figures, not current readings. Farmers quoted in the report described difficult choices: North Dakota farmer Don Nygaard said, “This winter is going to be tight for all of us trying to figure out which payments we can make.” They illustrate the strain reported then, not the circumstances of every grower today.

What do the latest crop and stock figures show?

USDA National Agricultural Statistics Service (NASS) figures provide a later snapshot of overall U.S. barley production and inventories. They describe crop outcomes and stocks; they do not establish why beer demand changed, what caused a price movement, or how much barley was available under malt-grade contracts.

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Measure Reported figure What it tells you
2025 U.S. barley production 141 million bushels, down 2% from 144 million in 2024 National production fell modestly year over year.
2025 planted acreage 2.30 million acres, a record low and down 3% from 2024 Less land was planted than in 2024.
2025 average yield 80.0 bushels per acre, a record high Higher yield per acre helps explain why production did not fall as much as acreage.
Total U.S. barley stocks on March 1, 2026 92.905 million bushels, versus 102.909 million on March 1, 2025 Total inventory was lower year over year; this is not a measure of malt-grade stocks, prices, or contract availability.

The acreage, production, and yield figures are from USDA NASS’s 2025 crop summary; the inventory comparison is from its March 2026 Grain Stocks report. Lower acreage and lower total stocks do not, by themselves, show that malt-barley buyers are paying more or that growers have regained bargaining power.

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What the pressure means for farmers and maltsters

For growers, the risk is that weaker demand narrows the number of dependable buyers just as oversupply or costs squeeze returns. Reuters’ 2024 account described farmers weighing whether barley remained a worthwhile crop. Steve Sheffels, a fourth-generation barley and wheat farmer, said, “Hopefully I’ll grow enough crop to cover my costs.” The report also quoted Maltwerks lead maltster Kaj Peterson saying breweries were cutting production and that the pullback was affecting the maltster’s bottom line.

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Brewers’ purchasing statements are not a substitute for evidence about current barley contracts. Anheuser-Busch InBev told Reuters it purchased “$700 million in the highest quality ingredients from 700+ grower partners each year,” but the company did not answer questions about its specific purchases that year or changing beer-consumption trends, according to the report. That attributed statement does not establish how much barley it bought or what growers were paid.

The later USDA totals show a smaller 2025 crop and lower total stocks in March 2026 than a year earlier, but current beer-consumption trends, malt-barley prices, and contract terms are not established by those statistics. The most defensible conclusion is that beer demand and crop supply both matter; the data cited here do not show that hard seltzer alone caused barley farmers’ financial pressure.

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