Every year, American breweries produce millions of pounds of spent grain—the primary byproduct of brewing beer. While it leaves the brewhouse as “waste,” at a farm it arrives as valuable feed and soil additive. This simple act of reuse shows the circular economy in action: what fuels our brewing culture can also fuel America’s food system.

Brewing Byproducts, Agricultural Benefits

Brewers in the U.S. generate about 4.7 million metric tons of spent grain annually. Roughly 90% of that material is already put to good use, primarily as livestock feed or compost. For every barrel of beer brewed, 15–20 pounds of grain can go directly to agriculture. That adds up quickly—an estimated 20 billion pounds each year.

Many brewers, especially small and independent ones, already donate their spent grain to local farmers. It’s a partnership that reduces farm input costs, keeps valuable organic matter out of landfills, and strengthens local economies. Still, a significant amount of spent grain is wasted, often ending up in landfills where there is no commercial benefit and contributes to greenhouse gas emissions.

A Policy Solution: The Excise Tax Credit

In 2025, the Texas Craft Brewers Guild spearheaded an effort to encourage this practice by offering brewers an excise tax credit on their spent grain donations. This effort, nicknamed “Beers for Steers”, fell short in the statehouse on its first try, but will return for the 2027 session.

To encourage more of these beneficial donations, the Brewers Association supports a state excise tax credit tied to the dry weight of spent grain donated. The proposal is simple: when brewers give their byproducts to farmers and ranchers, they would earn a credit against their state excise tax bill.

• Benefit to brewers: Currently the value on the open market of spent grain is roughly $40 per wet ton, which breaks down into approximately 8 cents per dry weight pound. Using these numbers, even a small brewer – most of the BA’s membership base – would see a significant benefit to their bottom lines, helping to offset rising costs of inputs. To focus the benefit on small producers without the scale to participate in the feed market, we recommend capping the credit at the amount of excise tax paid, up to $30,000 per year.

• Benefit to agriculture: By lowering feed costs with donations, the credit should boost donations, helping farmers and ranchers weather volatile markets. Feed prices hit their ninth-highest mark on record in March 2025, making affordable inputs especially critical.

• Benefit to the environment: When spent grain decomposes in landfills, it releases methane — a greenhouse gas many times more potent than CO₂. Just one ton of spent grain in a landfill produces the equivalent of 513 kilograms of CO₂, roughly the same as driving a gas-powered car from Phoenix to Chicago. Redirecting this material significantly cuts emissions.

Why Now?

Small brewers are being squeezed from multiple directions: inflation, tariffs and supply chain pressures, state budget shortfalls, new and proposed regulatory mandates, and increasing operating costs. Farmers are dealing with global price shocks in feed and inputs. Meanwhile, states are searching for practical, bipartisan policies that support local economies, reduce environmental impacts, and create maximum value from waste streams.

The “Brews to Barns” credit does all three. It gives small businesses breathing room, helps farmers manage costs, and keeps organic waste out of landfills. Most importantly, it encourages collaboration between two sectors that are both central to the American economy and way of life.

A Win-Win-Win

Passing a tax credit for spent grain donations isn’t just good policy—it’s common sense. Brews to Barns supports small brewers who keep our communities vibrant, farmers and ranchers who keep America fed, and an environment that belongs to all of us.

The Brewers Association wants to work with lawmakers to advance this legislation.