Disregarding quality issues, the economic analysis of whether to brew from malt extract or whole grain depends on their relative prices, your equivalent hourly labor cost, your batch size, how strong you make your beer, how much you brew annually, an estimate of the time-value of money, and your preferred mash method and mashing efficiency. For simplicity, assume a single-step infusion mash yielding reasonably good efficiency (80%). Also, this analysis assumes purchasing whole grain in bulk. (The analysis of grinding your own bulk grain vs. purchasing it milled is left as an exercise for the reader.)
Batch size and beer strength are considered together as lb base malt/batch, equipment costs are annualized using a 5% discount rate, and there is an assumption the equipment will be used to make about 200 gal/yr, the U.S. two-adult-household homebrew limit. Equipment and malt prices are based on an informal survey of U.S. suppliers during March, 2007.
Extract brewing requires negligible additional equipment, perhaps a grain bag for infusion.
- 6 lb/5gal LME($2.50/lb) or 5 lb DME($3/lb) ($15)
Extract Labor (1 hr)
- Heat brewpot to boiling, dissolving the extract and steeping grains as needed. (1 hr)
Additional Mashing Equipment ($20-50/yr → ≈$1-2/batch)1)
- Grain Mill ($130/20 yr = $10/yr)
- Sparge Water Tank ($30-150/30yr = $2-10/yr)
- Mash/Lauter Tun ($35-180/30yr = $2.50-12/yr)
- Extra Burner ($0-90/5yr = $0-20/yr)2)
- Tubing and fittings (<$5/yr)
Mashing Labor (2½ hr)5)
- Heat strike water and grind grain into the mash/lauter tun. (0.5 hr)
- Mash and heat sparge water. (1 hr)
- Sparge into heated brewpot. (0.75 hr)
- Heat to boiling. (0.25 hr)
It takes about 1½ hours additional time to mash your own grains to save about $7.50 in malt cost. Thus, excluding equipment costs, if your usual grain bill uses 7.5 lb base malt, it is not worthwhile to mash your own whole grains unless you make less than $5/hr. If you include equipment costs, the savings is only $6.50 and the break-even figure is at $4.33/hr take-home pay. Neither of these figures is a strong argument for doing your own mashing.
However, this situation changes significantly at larger batch sizes even though equipment costs are higher. A 20-gallon batch will need at least 30 lb base grain (24 lb LME) and save about $256) for the extra 1½ hours mashing time. If you take home less than $18.67/hour, it is worthwhile for you to mash your own grain.
I usually do a decoction mash in about 4 hours from strike to boil and routinely exceed 90% extraction efficiency. Although this doubles the additional labor time, it decreases the grain needed by 10-20% compared to a typical homebrew mash7). It is also simpler and more reliable. A 20-gallon batch will need at least 26 lb base grain (24 lb LME) and save about $318) for the extra 3 hours mashing time. If you take home less than $10.44/hour, it is worthwhile to do a decoction mash over an extract brew.