What happens to the byproducts produced by the brewing and distilling process?
Most Spent Grain Byproducts from Texas Craft Breweries and Distilleries end up feeding Texas livestock or serving as a base for compost to help grow some of Texas’s most legendary produce products. This practice has been happening for thousands of years and has been proven an efficient and reliable source of feed for livestock producers. This session, the Texas legislature has an opportunity to help brewers provide this grain to farmers and ranchers at no cost, by supporting an excise tax credit for brewers who donate their spent grain back into the agriculture process.
What will this legislation mean for Texas craft breweries?
Economic Relief: Brewers will gain tax relief for every pound of spent grain donated, easing the financial burdens of production.
Enhanced Operations: This tax incentive will encourage breweries to maintain or increase grain donations, reinforcing their role in supporting Texas agriculture.
Business Growth: With the costs offset by the tax credit, breweries can focus on expanding their operations and exploring new market opportunities.
What will this legislation mean for ag producers and our state economy?
Reduced Costs for Farmers: Providing no-cost, high-quality feed helps lower overhead for ranchers and farmers, directly supporting Texas’s proud BBQ tradition and other agricultural needs.
Economic Boost: By alleviating some financial pressures for breweries, this initiative also supports the broader economic landscape, helping sustain jobs and stimulate local economies.
Agricultural Efficiency: Encouraging the use of spent grain as feed helps optimize resource use in farming, important for the productivity and efficiency of Texas’s agricultural resources.
Case Study: Mash Tun to Milk Carton
Spent Grain as a Dairy Cattle Food Source
Texas craft brewers contribute over 100 million pounds of Spent Grain Byproduct (SGB) annually to Texas agricultural producers. But what is the cost impact of this contribution on Texas cattle producers?
Bovine nutrition experts recommend limiting SGB to 40% of a dairy cow’s diet to maintain optimal milk production and health. An average dairy cow consumes about 115 lbs of food daily, totaling roughly 42,000 lbs annually. At the recommended cap, this translates to approximately 16,800 lbs of SGB per cow per year. Considering a 1:1 ratio of SGB to bags of cattle cubes, this equates to replacing about 336 bags of cattle feed per cow each year. With the current price of cattle cubes at Tractor Supply being approximately $10.50 per 50-lb bag, the potential savings per cow amount to $3,528.
For an average Texas dairy operation with 4,000 head of cattle, the total savings from using a 40% SGB diet could reach approximately $14 million. If these savings were applied across the entire Texas dairy cattle population of 642,000 head in 2023, the potential statewide savings could exceed $2.25 billion. This calculation assumes the total weight of SGB used is over 10.7 billion lbs, which corresponds to about 149 million barrels of beer produced by Texas breweries, based on an average grain usage rate of 72 pounds per barrel.
Considering the current production levels of SGB by the Texas craft brewing industry, the realistic savings for the broader cattle industry, not limited to dairy, amount to about $21 million. This projection highlights the broader impact of potential legislation, which could also encourage large brewers, distilleries, and out-of-state breweries to donate SGB, thereby increasing savings across various livestock industries and even supporting regenerative farming practices. This legislation, however, would not exclusively reserve SGB for the dairy industry, instead offering cost benefits to a diverse range of agricultural sectors.
Support texas craft brewers
and Texas agricultural producers!
Support SB 1554 & HB 3336
Texas craft breweries serve as more than just beverage producers; they are pivotal contributors to our state’s agricultural landscape. The “Beers for Steers” legislation introduces a necessary excise tax credit for spent grain donations, driving further support for local agriculture by encouraging more substantial contributions from brewers, despite the rising costs they face.
This legislation recognizes the essential collaboration between our brewers and the agricultural sector, providing a financial incentive that promotes the continued partnership that has historically benefitted both industries. By supporting Beers for Steers, we not only aid our brewers in managing economic challenges but also enhance the agricultural output that feeds and sustains our communities.
Get in Touch!
Travis Bailey | Government Affairs Associate
travis@texascraftbrewersguild.org