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Michigan malthouse startup a Rural Entrepreneurship finalist

LANSING, MI -- A pair of mid-Michigan entrepreneurs looking for their niche in the state's burgeoning craft beer industry have made it to the final round of the American Farm Bureau Federation's (AFBF) 2016 Rural Entrepreneurship Challenge. Now in its second year, the contest provides opportunities for enterprising individuals to showcase and grow their food and agriculture-related businesses developing in and benefitting rural America.

Among this year's four finalists is Fedora Malthouse, a value-added grain processor based in Isabella and Clinton counties. Principals Julie Baker and John Enderle intend to take advantage of the booming craft beer movement by supplying high-quality, Michigan-produced malted barley.

Inspired by a mutual love of good beer and MSU Extension bulletins confirming Michigan's suitability for barley cultivation, Enderle dove headlong into surveying the state's current craft beer landscape. To no one's surprise, what he found was dynamic growth across the board—with one exception.

Despite more than 150 small breweries already in operation—and hops cementing their status as the new 'it' crop—barley cultivation and malt production haven't kept pace. Currently Michigan boasts only one other commercial malt house.

Malt is harvested grain that's allowed to partially germinate, then quickly dried. Arrested in a state of partial germination, the malted grain contains enzymes just starting to convert starches into sugars, which yeast will convert to alcohol later in the brewing process.

After attending a hop and barley conference this spring in Grand Rapids, Enderle returned to his Clinton County farm outside DeWitt and began strategizing how to incorporate winter barley into his existing corn-soybeans-wheat rotation. He and Baker continued their research in Pennsylvania and central New York, visiting operating malt houses and exploring barley varieties at Cornell University.

While Enderle tills the land, Baker runs Fedora's business office out of her home in Shepherd. The two were in Washington, D.C. this week, where the contest finalists were announced. They'll return with $15,000 in prize money, and could net more this winter if their enterprise bests three other contenders.

"Actually our first batch of barley seed has been delivered and John will be planting that as soon as we get home," Baker said over the phone from D.C. "We picked Wintmalt, a certified malting barley, based on its specific parameters—the sugar profile, proteins, etc. We learned a lot in Pennsylvania and New York about what brewers are looking for, in terms of very specific sugar and flavor profiles for brewing."

Another thing they learned is that nobody in the U.S. manufactures malt house equipment. That's where their Rural Entrepreneurship windfall will come in handy once that barley seed's in the ground.

"We found that a lot of organizations are promoting the cultivation of maltable barley," Baker said, but processing often gets overlooked. "You can grow it all day but how are you gonna process it? Nobody in the U.S. makes the equipment for a malt house—nobody."

To that end, the pair will be meeting with Michigan-based manufacturers of agricultural equipment to design, build and outfit Fedora's production facility with the necessary machinery.

A former small business consultant with a taste for stout—"John's an IPA guy," she said—Baker credits the Michigan Economic Development Corporation and a business incubator based at Central Michigan University for helping her and Enderle turn Fedora from a napkin sketch into a bright-futured reality.

She's tapped those resources to develop a lengthy marketing list of Michigan breweries for shopping around Fedora's first batches of malt, just about this time next year.

"I know—it's exciting!"

The other Rural Entrepreneurship Challenge finalists are:

AccuGrain of Rose Hill, Iowa developed a system for using X-ray technology to inventory flowing grain in real time.

AgriSync of Dallas Center, Iowa developed a mobile customer-support platform for crop farmers.

Farm Specific Technology of Bolivar, Tenn. developed a no-till crimper for cover crop production.

The top challenge teams were selected by 40 judges with expertise in business development, equity investment fund management, agribusiness lending and entrepreneurial coaching.

All four finalists will pitch their business ideas to a team of judges in front of a live audience at AFBF's 97th Annual Convention and IDEAg Trade Show in January in hopes of winning the Rural Entrepreneur of the Year Award for an additional $15,000. A People's Choice Award could add $10,000 more, totaling prize money of up to $40,000.