Most bankers tossing back a cold one after work probably don't think twice about what's in their beer.

Kenneth Stumpf does.

"This is a crop we're very comfortable with," said the vice president of $78 million Eaton Bank, whose customers grow northern Colorado malt barley each year under contracts with Coors Brewing Co. in Golden, Colo.

Mr. Stumpf has developed a real taste for the products he funds. A lender must know the nuances of each commodity to make sensible evaluations - and avoid credit disasters. "If the stuff is good, we know their check is going to be good," he said.

Though roughly 35% of his bank's $63 million in loans is in farm loans, fewer than 5% of his farm customers have barley in their mix, Mr. Stumpf said.

But for bankers, malt barley has several advantages over other commodities, observers said.

"From a lender's standpoint, it's probably a lower-input type of enterprise," said Norm Dalsted, an agribusiness management economist at Colorado State University. "You don't have the investment per acre that you would have in corn or sugar beets."

Moreover, barley adds diversity to the farmer's operation. (Other crops grown in Eaton Bank's market include corn, alfalfa, and sugar beets.)

Malt barley also fits well in crop rotation, utilizing runoff irrigation from the mountains before other crops need it and bringing early cash from its July harvest, said Bob Becker Sr.

Mr. Becker and Bob Jr. grow 200 acres of barley among their 1,700 acres of crops near Fort Collins.

Farmers in the area plant around February, and harvest beginning in mid- July. "Having the contract makes it so easy to work a cash flow," Mr. Stumpf said.

It takes 24.7 pounds of barley to make a 28-case barrel of beer, Coors says. The brewer contracts with its growers to buy their barley at a predetermined price - generally $6.20 to $6.75 for 100 pounds. ("You don't see beer prices change much," Mr. Stumpf said.) This year Coors' price was $6.50.

Coors can reject barley that fails its quality tests; farmers sell that grain for animal feed.

Feed barley usually commands about $2 per 100 pounds less than Coors' price, said Allen T. Matsuda, an area manager at the Coors plant in Longmont, Colo., who oversees 76 million pounds of barley annually in Colorado and Wyoming.

But this year's high corn prices also have pushed up the price of feed barley as an alternative. It peaked at about $7.25 per 100 pounds and recently was around $6.75.

"In all of our years, this is the only year I can even remember that feed barley is higher than contract barley," the senior Mr. Becker said. "It probably will never happen again."

Moreover, the Beckers lucked out this year with what ordinarily would have been a hard-luck harvest: Their barley failed Coors' protein test. (Too much protein makes cloudy beer.)

To compensate its growers for this year's pricing anomaly, Coors plans to pay its producers a bonus early next year, Mr. Matsuda said. Mr. Stumpf called the proposed bonus "great," and said it would give a boost to farmers' cash flow. (He joked that it could cost the bank interest if customers are able to pay down more debt.)

Although malt barley lenders often can rely on contracts like Coors', they still don't know how much the brewers actually will accept or how much crop will be hurt by weather or disease.

Mr. Matsuda said the last few years demonstrate the fluctuation in what he accepts. Three years ago, it was 99% of the anticipated harvest. Two years ago it was 58% and last year 82%, he said. This year he's expecting just half; hail and other factors have taken their toll.

When evaluating credits, Mr. Stumpf deals with the issue by anticipating about half of farmers' expected malt barley income from the contract price and half from feed market prices.

Much of the future of the product will be driven by brewery contracts, Mr. Stumpf said, although some customers have abandoned malt barley in recent years, seeking more profitable crops.

An upsurge in new local housing, which has shot the bank's construction loans up 200% in two years, also will affect all farm loans. "Our forte is ag loans," Mr. Stumpf said. "As we keep losing ag land, it does take away from our customer potential." Eaton Bank has offices in its namesake town and in Greeley and Fort Collins. Its sister bank, $27 million-asset Farmers Bank, is based in Eaton.

The diversification that has pushed farm loans down from 60% of the bank's portfolio is good in some ways, Mr. Stumpf said. "It's just like a farmer being diversified," he said. "You have to have that different mix of loans."

Nonetheless, farmers will keep on tapping what markets are there. In Colorado, that means malt barley, he said.

"It's always going to be here," he said. "It's a steady crop we can count on every year. Coors is here."

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