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Expanding Kansas Agriculture to Respond to Booming Brewery Business

The microbrewery industry in Kansas is growing faster than ever with demand higher than supply across the state.  The Kansas legislature is attempting to respond with bills aimed at bolstering the microbrew and cider production business, but growing production will increasingly burden the already short supply of ingredients such as hops, barley, and fruits.  Kansas farmers are in a unique position to capitalize on an industry that is not only booming in Kansas but across the nation.

Before Kansas farmers jump into hop farming, some considerations regarding the unique hop farm industry should be addressed.  Hops are a fickle plant that often do not produce a significant crop until their third year.  Forward hop contracting is a system that helps to protect the farmer making such a long-term investment.  Forward hop contracts for Kansas farmers ensure that a brewing operation will purchase a set tonnage of hops produced by the farmer in the next 1-2 years.  Having contracts such as this in place helps to protect the up-front investment made by farmers as well as helps the breweries plan ahead knowing a reliable hop producer is in their corner.  These contracts need to be planned through completely with both parties; simply signing the contract produced by the other party may not protect your operation and investment adequately and reviewing the agreement with your attorney is highly advised.

Kansas has never been widely known for its fruit harvest, but changing cider production laws may boost the niche Kansas fruit farming market.  Cider is produced from the fermentation of fruit and a new Kansas law currently going through the legislature states that cider produced in Kansas must contain at least 30% local Kansas fruit.  Like hops, most fruit crops are long-term investments such as orchard trees or grape vines.  Acquiring and expanding an existing orchard or vineyard may be a better choice than starting from scratch.  When your existing farm operation merges or acquires existing fruit production farms, the merger or acquisition needs to be structured carefully to protect the individual interests at play.  Taking on debts or liabilities of an existing company is a large undertaking that can leave your business exposed to lawsuits or unplanned monetary obligations.

The brewery and cider industry in Kansas is a great opportunity for Kansas farmers to respond to the needs of a new industry and support the Kansas economy.  Keeping production local is a benefit to the farmer, brewer, and consumer as well as the state as a whole.  If you have questions or concerns about expanding your agriculture operation to support the Kansas microbrewery and cider production industry, call The Law Office of Nathaniel Gilbert for an absolutely free consultation to help address your concerns and see if the move is right for you.  A qualified attorney in your corner can make all the difference in a successful venture.

Kansas Brewery Legislation Aids in Distribution, Cider Making

Senate Bills 326 and 277 passed the Kansas Senate unanimously last month and have now moved on to the House.  Both bills contain legislation affecting the production limits and manufacturing protocols for microbreweries in Kansas.  Bordered by Colorado and Missouri (the original home of Anheuser-Busch) Kansas is often seen as playing catch-up to its neighbors and the bill recently introduced to the legislature would seek to change that perception drastically.  

Senate Bill 326 deals with the production caps for Kansas breweries.  Currently, Kansas brewers are limited to producing 30,000 barrels a year.  HB2189 would raise that cap to 60,000.  Considering both Colorado and Missouri both have NO production cap, the fact that a cap exists at all severely hampers the ability of Kansas brewers to compete out of state.  The craft beer boom in Colorado has seen 106 breweries added in just two years.  The economic impact of such a market in Kansas would be astronomical.  

Senate Bill 277 would allow for Kansas microbreweries to produce hard cider, up to 100,000 gallons of it per year.  Additionally, the bill would change the definition of "wine" to include hard cider.  An interesting portion of SB277 states that 30% of the fruit used to make the hard cider must be from Kansas.  Allowing microbreweries to expand their production is beneficial to both the consumer and the industry as a whole.

For Kansas breweries this means expanding businesses to compete.  Whether adding a new location, contracting with an out of state distributor, or finding new sources for hops, an attorney can be a valuable asset.  The Law Office of Nathaniel Gilbert works to support breweries, vineyards, and distilleries and help them make their mark on the industry.  All consultations are 100% free and we'd love to hear about your business.  Give us a call to learn more about how we can help your brewery be ready for the changing markets.