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“Beers for Steers”: Texas Ranchers & Brewers Working Together To Fend Off Inflation

“Texas is a big state, and we have a big opportunity to grow if we can continue to fix these kinds of anti-competitive, antiquated laws limiting Texas brewers' access to the market.”  ~ Caroline Wallace, Executive Director, Texas Craft Brewers Guild

State of Texas

Texas craft breweries produce over 1,519,691 barrels annually, ranking 3rd in barrels of craft beer produced yearly. Barley farming in Texas tops out at 30,000 acres, and according to the USDA Agricultural Statistics Department, most Barley farming is done in Montana and The Dakota region - in colder climates.  Once all that Barley and other grains are processed, brewers need a method and place to offload those Brewer’s Spent Grains (BSG), a byproduct of the brewing process.  What better place than to supplement feed at cattle ranches across the Lone Star State during an inflationary period? Creating a product lifecycle that works with farmers and producers, some call it “Grain Gathering.”  

Texas Ranchers & Brewers Cutting Feed Costs

The brewing byproduct, or BSG, is the primary resource for ranchers. The brewing cycle's leftovers and liquids, such as Trub and Yeast, are typically dealt with through renewable resource management, too. The craft beer industry has been in front of the challenge and making strides for decades. In Texas, craft brewers who are members of the Texas Craft Brewers Guild are working to propose an excise tax credit based upon the amount of BSG being donated back into the Agriculture process for animal feed and other uses such as composting.

Texas Longhorn

Craft beer and farmers are upcycling, creating a circular economy and a secondary cost share. Recently, in a letter to brewers and community partners, Travis Bailey, Government Affairs Associate from The Texas Brewers Guild, said, “Beer is an inherently agricultural product, and by tying our industries together in this way, our state has an opportunity for Texans to have a win in the long run." A true environmental stewardship model focuses on strengthening relationships with the producers who help brewers make amazing products for us to enjoy. Brewers, in turn, can help return the favor by providing a high-protein feed supplement to quality Texas livestock.   



Legislative History in Texas Beer Production

1933 marked a milestone in legislation in the United States under FDR. The National Industrial Recovery Act (NIRA) launched commerce, new companies issuing stock for investment, and a framework around securities issuance, new business development, alcohol trade and new business codes, and the regulation of commerce. In the State of Texas, they are no stranger to advancing legislation for commerce, and by 1935, they voted to repeal state dry laws, progressing toward what is known as The Texas Alcohol Beverage Code today. From there, the genesis for self-distribution took shape, known as SB 419.  Allowing Texas breweries to self-distribute <75,000 barrels per year. 

Texas Beer Legislation

By the early 1990s, Texas brew pubs were on the docket, and so was HB 1425 in 1993, which allowed businesses to brew beer and serve food under one roof. The license allowed brew pubs to brew and sell no more than 5,000 barrels of beer annually, direct to customers onsite and to-go. By the end of the 1990s, beer tasting and gastro-tourism took shape in Texas, becoming a micro-industry among brewers. By the early 2000s, beer legislation took shape in Texas, from Exclusive Territory Rights to 2018, where CraftPAC was formed to advocate for an even bigger and broader industry. 

It is important to note that Texas offers two different brewing licenses that have different privileges and are in separate tiers of what is known as the three-tier system. For example, manufacturing brewers make up a majority of The Guild’s largest membership but also are some of its smallest members; many have added a brewery license to their existing wine or distilling licenses. Brewpubs make up a majority of their members but have lower max caps on production and smaller allowed self-distribution volumes.

Starting in 2019, because of the “Beer To Go” bills (HB 1545), Texans can buy beer direct-to-consumers for on-premise consumption and to-go, and also traditional distribution methods.  This passage, which made Texas the last state to allow manufacturing breweries to sell for off-premise consumption, was life-saving for the industry during the COVID-19 pandemic. 

The Texas Beer Industry Is Ripe For Expansion

The beer industry in Texas employs over 4,000 people, with the bulk of employment coming from packaging, logistics, sales, and production. Recently, from the Washington Beer Blog, the total number of breweries in the United States increased to 9,683.  While 495 new breweries opened, 418 closed. With over 37 breweries in Austin, the rest of the state is ripe for growth.  At the end of 2023, the U.S. Census Bureau showed that Texas added 473,000 new residents last year, which brings population levels in Texas to 29,145,000 people. California’s brewing industry is double what Texas runs, with only 10,000,000 more residents in the state.  There are 70 Breweries in Planning (BiPs) currently to date in Texas, and more are coming online each quarter. 

Texas Beer

Texas brewing has a vibrant scene in and around metro areas, and growth is coming online in the suburbs and out in the farming territories. Texas is the 6th highest total craft beer production state but currently sits at 48th per capita in production. There is room for expansion in more suburban and rural parts of the state that might not have their own local brewery or brewpub yet.  Founded in 2020, Hound Song Brewing, based in Columbus, Texas, is a great example of beer businesses popping up outside city centers. 

"Beers for Steers” offers a simple solution that benefits people, businesses, livestock, and the environment. In a state as large as Texas, the successful launch and continued growth of this program could pay dividends to farmers, brewers, and Texans for generations to come. Stay tuned when the 88th Session comes into focus and votes on an opportunity for brewers to potentially take advantage of some economic easing. 

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