A farmer in Lee County harvests barley as part of an effort to develop a grain market for craft brewing in Southwest Virginia. (Starscape Media / Mission First Digital)
ST. PAUL — On a quiet Thursday afternoon in St. Paul, a town of about 850 that sits on the banks of the Clinch River straddling Wise and Russell counties, Greg Bailey was filling a growler of Scotch ale.
Beer has a colorful history in these parts. Once it flowed like water: so rowdy was one stretch of saloons on St. Paul’s riverfront in the 1920s that it was nicknamed the “Western Front” after the European line of battle in World War I. While the barrooms closed long ago, the alcohol trade remained anathema to many residents of the surrounding “dry” counties. In 2015, 113 people signed a petition opposing a brewery or the sale of liquor by the drink in St. Paul and presented it to the town council.
Since then, tempers have moderated, and Bailey’s Sugar Hill Brewery has become one of the small town’s main attractions. “Our beer’s so popular we can’t make it fast enough,” he said.
In Southwest Virginia, where economic discussions are still dominated by the shrinking coal industry, the success of Sugar Hill and a handful of other breweries has attracted attention from not only economic development groups, but Virginia Tech and state officials.
Beer is perennially popular and since 2012 when the General Assembly passed a law allowing sale and consumption at breweries, its production has exploded across Virginia. But for Southwest Virginians looking to diversify the region’s economy, it’s not beer that offers the most promise. It’s grain.
For two years, a large coalition of agencies and organizations — from the Virginia Department of Mines, Minerals and Energy to the Lonesome Pine Regional Industrial Facilities Authority to the InvestSWVA business incubator — have been planting the seeds of a novel idea: make Southwest Virginia the primary state source of specialty grains for Virginia’s craft beverage industry.
“This is something that people, looking back on it, (would say), ‘You’d be crazy to do it,’” said Will Clear, director of finance and project administration with Virginia DMME. “But I think that’s what we’re going to need. We need that innovation in Southwest Virginia. We just can’t sit around and wait for it to happen.”
Agriculture has long been a leading industry in the coalfields region, and grains were once grown widely. U.S. Department of Agriculture surveys record Lee County producing as many as 78,700 bushels of wheat in 1937; Scott County nearly hit 100,000 bushels the following year.
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With so much production, grain mills also became ubiquitous. One 1973 survey of old mills in Lee, Scott and Russell counties described 19 historic structures.
“You would have seen wheat production in Southwest Virginia to a reasonable extent from, say, the Depression era up through the 1970s and 1980s,” said Wade Thomason, a professor with Virginia Tech and the state’s grain crops extension specialist. The grain market, while not booming, was brisk for decades, primarily serving the region.
“There was a time there where for every draft animal you had to work the land, you needed two to three acres of corn,” said Thomason. “It was a self-fulfilling system.”
Over time, however, declines in wheat prices and increasing vertical integration in agriculture — where a single company assumes control of the different stages of a commodity’s production — began to squeeze both local farmers and local grain processors out of the market.
“They just lost that local demand,” said Thomason. “That small mill and maybe a couple of bakeries that would have supplied two or three counties became one big mill that was much further away that supplied one big bakery.”
By 2017, Lee County was only recording 1,900 bushels of wheat on USDA surveys. Some growers in the county were still raising wheat, said extension agent Amy Byington, but “there was no local outlet, a large one anyways.” After a local mill roughly 45 minutes away in Rogersville, Tenn. closed in 1996, grain had to be trucked to Louisville or beyond.
“We’re four hours in any direction from a place that can hold a large amount of grain and clean it,” said Byington.
Still, even as grain production continued to retreat year over year, it wasn’t forgotten. Thomason in particular recalled the prior yields that demonstrated specialty grains can flourish in Southwest Virginia, where the relatively mild mountain climate is favorable for such crops. Furthermore, Virginia Tech’s small grain management program had done a significant amount of research on malt barley, and “we were looking at the demand from the craft beverage industry and seeing there was a need for local supply.”
When Clear and InvestSWVA director Will Payne showed up at Virginia Tech looking to talk about potential economic development in the region, Thomason pitched the idea.
“I told them that I thought we could do this,” he said.
Farmers in the region proved cautious — but curious. The burley tobacco that had once been one of Southwest Virginia’s most valuable commodity crops has, like coal, been on the decline, and the beef cattle that have in many instances replaced it often aren’t as profitable.
“It’s a good opportunity for many farmers,” said Byington, who has shepherded participants through two growing seasons. “They need a cash crop, and this is a cash crop where they don’t have to have a lot of labor.”
In 2019, the newly named “Project Calypso” led to the planting of almost 30 acres of malting-quality barley in Lee and Scott County that was later processed at the Riverbend Malt House in Asheville, N.C. before being shipped to 18 Virginia brewers, including Sugar Hill in St. Paul. A second crop planted in 2020 has also been transported to Asheville.
In Payne’s vision, the grains aren’t just a commodity equivalent to barley produced anywhere else. Rather, they’re a brand, one he’s christened “Appalachian Grains.”
For the breweries, the attraction is twofold: customers have an increasing interest in locally sourced products, and cutting down on the miles grains have to travel to be malted can also cut down on costs.
“People want to know where their food comes from, and they like for it to be local,” said Byington. “You’re almost going back to what my dad had.”
For DMME, which has increasingly been focused on reducing carbon emissions, the prospect of diminishing the industry’s carbon footprint was also a draw.
“There’s 400,000 bushels of grain that’s imported into the state … from Canada, the Midwest and overseas,” said Clear. “Think of the carbon footprint that we can reduce by taking a substantial portion of that and using our family farms, building our family farms.”
Southwest Virginia’s mountainous terrain, of course, limits the size of the crops the region can produce. But Byington said the smaller scale of cultivation — on the order of 100 or so acres — could actually offer greater flexibility for brewers and distillers looking to experiment with different grains.
“A lot of the distilleries are asking us for different grains. … We in the future could offer a lot of unique niche market grains that the larger people can’t do,” she said.
“This isn’t a huge industry. A few thousand acres of malting barley growing in Southwest Virginia would certainly supply the craft outfits in Southwest,” said Thomason. “It’s not one of those crops that’s going to take over and be hundreds and thousands of acres. It’s going to be an opportunity to make a little more money for some farmers.”
For the project’s backers, the past two years have shown there’s demand for malting grains, and that farmers are willing to supply them for craft brewers. But one major bottleneck remains: processing.
“When Will (Payne) and I first started looking at this project, we started talking to folks in the Midwest, large grain operators,” said Clear. “They weren’t interested in operating something as small as this.”
The group wasn’t deterred. If the grain operators wouldn’t come, they decided, they would build an operation themselves.
“You’ve got to have that infrastructure. You’ve got to have that network. And you’ve got to build that all out for it to work,” said Thomason.
The answer they devised was Project Thoroughbred, a plan to construct a grain terminal on abandoned mine lands in Norton. The Lonesome Pine Regional Industrial Facilities Authority would own it, and Mountain Empire Community College would operate it and allow students pursuing certification in grain management to train there.
Gov. Ralph Northam’s administration has been willing to pony up federal and state dollars to get Thoroughbred off the ground. Between 2020 and 2021, DMME has approved $2.5 million in federal funds through the Abandoned Mine Land Economic Revitalization Program for the effort (the federal Office of Surface Mining and Reclamation has the final say over the expenditures). The project has also gotten funds through the state’s GO Virginia program and the Tobacco Region Revitalization Commission.
“We have all the funding secured for the project,” said Duane Miller, executive director of the Lonesome Pine Regional Industrial Facilities Authority. “When we do get there, we’re ready.”
To Thomason, the terminal may prove a turning point for the project, from a pilot to the foundation of a renewed industry in the coalfields.
When people “see some concrete and steel structures going up and a set of scales to make an official buying point, then they’re probably going to say, ‘Oh this is for real,’” he said. “We have to have this recognition from people that, oh, this exists and I like that and I want to have more of that.”
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