Key-words of the industry
This agribusiness glossary of terms explains some of the most frequently used words in barley, malting and brewing industry.
Accounting – System of recording and summarizing business and financial transactions and analyzing, verifying, and reporting the results.
Agricultural commodity – A product of agriculture, any crop or other commodity produced, whether or not it is insurable.
Agricultural experts – Persons having, involving, or displaying special skill or knowledge derived from training or experience whose research or occupation is related to the specific crop or practice for which such expertise is sought.
Annuity – A sum of money payable yearly or at other regular intervals; also called annuity in arrears.
Annuity due – An annuity with payments made at the beginning of each period; also called advance payment annuity.
Annual crop – An agricultural commodity that normally must be planted each year.
Appreciation – The increase in the value of an asset due to varying economic or inflationary conditions.
Barley – A cereal grain of H. vulgare or its varieties that have short leaves and dense bristly flower spikes and are widely cultivated for grain and forage. It is used as a livestock feed, for malt production, and for preparing foods.
Barley grits – Barley grains made from pearled or whole grain barley kernels that have been cut into small pieces, used as a cereal or cooked side dish.
Barley malt – A natural sweetener that is derived from barley. It’s made by soaking and dryong barley kernels, which are then allowed to germinate or sprout in a controlled environment.
Base malts – A category of malt. Base malts are rich in enzymes and have enough diastatic power to convert starch into malt sugar, which is essential for the formation of alcohol, aroma etc. during the fermentation process. The base malts provide the highest extract potential.
Beer – An alcoholic beverage usually made from malted cereal grain, such as barley, flavored with hops (which adds bitterness and acts as a natural preservative), and brewed by slow fermentation. Beer is the world’ most widely consumed alcoholic beverage and the third most popular drink overall, after water and tea.
Breakeven price – The price that a producer must receive for a product in order to recover all of the costs associated with producing the product.
Brewing – The process of making beer, ale, and other malt beverages by boiling mashed malt to produce a wort, flavoring the wort with hops, fermenting this mixture with yeast, and drawing off the fermented wort for bottling.
Cash flow – Cash money flowing in and out of the business. Cash flow is not the same as profitability.
Cash inflow – Cash flowing into the business from all sources over a period of time. Cash inflow usually arises from one of three activities – financing, operations or investing. Includes the sale of company products, new loans received, sale of capital assets, and non-company income.
Cash outflow – Cash flowing out of the business from all sources over period of time. It results from expenses or investments. Includes the purchase of production inputs, machinery, repayment of borrowed money etc.
Capital budget – Provides an estimate of the feasibility of making investments in long-term assets.
Capitalize – An accounting method used to convert future income to current value, by recording the expense as long-term assets.
Caramel (Crystal) Malts – A sweet malt which conveys a golden color and a caramel flavor to beer, used in darker ales.
Catastrophic Risk Protection Endorsement – The part of the crop insurance policy that contains provisions specific to catastrophic risk protection.
CIF (Cost, Insurance and Freight) – A trade term requiring the seller to arrange for the carriage of goods by sea to a port of destination, and provide the buyer with the documents necessary to obtain the goods from the carrier.
Cover crop – A crop generally recognized by agricultural experts as agronomically sound for the area for erosion control or other purposes related to soil conservation or improvement.
Crop Provisions – The part of the policy that contains the specific provisions of insurance for each insured crop.
Crop year – The period within which the insured crop is normally grown, whether or not it is actually grown, and designated by the calendar year in which the insured crop is normally harvested, unless otherwise specified in the Crop Provisions.
Dehulled barley – Considered a whole grain, dehulled barley still has its bran and germ making it a nutritious and popular health food.
Direct costs – Costs that specifically identify with a particular enterprise of the company.
Dry Roasted Malts – Dry-roasted malts are produced by kilning at very high temperatures followed by roasting. The heat and duration of the roasting determine the color and flavor of malt. Dry-roasted malts include amber malt, biscuit malt, brown malt, black malt, chocolate malt, and dark chocolate malt.
Explicit costs – Costs paid outside the business
Farm Stays – The activity of visiting a farm to participate in and enjoy farm activities, and for overnight stays.
Farm Visits – The activity of visiting a farm for short periods of time to participate in and enjoy farm activities.
Fixed costs – Costs that do not change with the level of production.
FOB (free on board) – A trade term that specifies which party (buyer or seller) pays for which shipment and loading costs, and/or where responsibility for the goods is transferred. It means that the seller pays for transportation of the goods to the port of shipment, plus loading costs. The buyer pays freight, insurance, unloading costs and transportation from the port of destination to his factory.
Gross income (revenue) – The total income, both cash and non-cash, received from an enterprise or business, before any expenses are paid.
Gross margin – The difference between gross income and variable costs. Also called income above variable costs.
Hops – The ripe dried pistillate catkins of a perennial north-temperate zone twining vine of the hemp family used especially to impart a bitter, tangy flavor to malt liquors.
Hulled barley (or covered barley) – It refers to covered barley that has been minimally processed to remove only the tough inedible outer hull. Hulled barley may be purchased in several forms including kernels (berries), cut (grits), flaked or ground (meal or flour).
Hulless barley – It refers to a type of barley in which the tough inedible outer hull is loosely adhered to the kernel. The outer hull is so loose, that when this barley is harvested in the field, the outer hull usually falls off. Processors often refer to this type of barley as “naked” barley.
IBU – are International Bitterness Units; they indicate the level of bitterness in a finished beer.
Internal rate of return (IRR) – The discount or interest rate at which the net present value of an investment is equal to zero.
Major crops – Include almonds, apples, barley, canola, carrots, corn (field and sweet), cotton, grapes, hay, lettuce, oats, oranges, peanuts, pecans, popcorn, rice, rye, snapbeans, grain sorghum, soybeans, sugarcane, sugarbeets, tobacco, tomatoes, sunflowers, and wheat.
Major land resource area (MLRA) – A geographic area, usually several thousand acres in extent, that is characterized by a particular pattern of soils, climate, water resources, land uses, and type of farming.
Malt – A grain, usually barley, that has been germinated through a soaking process and then dried. Malt is used in brewing and distilling, and as a nutrient additive.
Malting – Malting is the process of converting barley into malt, for use in brewing or distrilling, and takes place in a malting, sometimes called a malthouse, or a malting floor.
Margin (deposit) – cash or collateral that is deposited by a client with a commodity or securities broker to protect the broker from loss on a contract.
Mashing – The process of subjecting the crushed malt to the action of water with heating and stirring to prepare wort.
Operating costs – Costs for the purchase of inputs and services that are used up in one production cycle. Includes variable costs with a planning horizon of one production period.
Overhead costs – Costs that are not directly related to the type and quantity of products produced.
Pearl barley – Dehulled barley which has been steam processed further to remove the bran. It may be polished, a process known as “pearling”. Dehulled or pearl barley may be processed into a variety of barley products, including flour, flakes, and grits.
Roasted malt – It’s malt roasted to varying degrees that produce a range of specialty malts such as caramel, chocolate, and black. They convey a certain color and flavor to the beer.
Six-row barley – A barley variety that refers to the number of kernels on the stalk of the barley. The six-row barley has a higher enzyme content for converting starch into fermentable sugars, more protein, less starch, and a thicker husk than two-row barley. It offers a greater yield and is used by most major brewers.
Specialty malts – A category of malt. Specialty malts have little diastatic power; they are used to provide flavor, color, or “body” to the finished beer.
Two-row barley – A barley variety that refers to the number of kernels on each stock of the barley. The two-row barley has a lower enzyme content, less protein, more starch (the principal contributor to extract), and a thinner husk than six-row barley. It offers a lower yield and more expensive for the farmers, but conveys a smoother and less grainy flavor to the beer.
Whole grain barley – refers to barley that has been minimally processed or cleaned so that most of the bran and endosperm is left intact and the germ is present.
Wort – A sweet, amber-colored liquid drained from mash and fermented to make beer and whiskey.
Yeast – A yellowish surface froth or sediment that occurs especially in saccharine liquids and promotes alcoholic fermentation, consisting largely of cells of a fungus.