SUPPLY-SIDE RISKS AND MALTING BARLEY PROCUREMENT AND STORAGE

U.S. production of six-rowed malting barley has declined sharply over the last several years. Further, the quality of U.S. malting barley has suffered repeatedly due to disease. This has left the U.S. malting industry dependent on a single-desk seller of malting barley, the Canadian Wheat Board. In this paper, we develop a discrete stochastic programming model to analyze the procurement and storage decisions of the U.S. malting industry. We employ the model to investigate the impact that various sources of risk have on the industry's reliance on imported barley. The results indicate strategies that mitigate dependence on imports.