Farm Ireland

Tuesday 20 February 2018

MCI cuts contracts by 35pc due to carry-over of stocks

Declan O'Brien

Declan O'Brien

The Malting Company of Ireland (MCI) has cut growers' contracts by 35pc for this year's harvest -- in a move that will impact on hundreds of tillage farmers across the southern half of the country.

The company, which is jointly owned by Dairygold, Glanbia and IAWS, has a capacity for 30,000t of malt but a carry-over of stock from last year prompted the decision to cut intake.

The reduction will be implemented at an equal rate on all growers. Farmers with MCI contracts were informed of the cuts over the past week.

Industry sources said the reduced demand for malting barley was the result of difficulties in the distilling sector.

The MCI move follows the decision by Greencore subsidiary Minch Malt to cut its malting barley intake by 25pc.

IFA representatives are today to meet with Greencore Malt's David Wilkes to discuss outstanding issues regarding the withdrawal of contracts from close to 640 suppliers of the company's malting barley growers.

Mr Wilkes is set to continue dealing with Irish tillage farmers, despite Greencore's sale of its malting business to the French farmer-owned outfit Axereal, as he will be second in command of their malt division, Boortmalt.

The discussions between the IFA and Mr Wilkes are likely to centre on pushing for compensation for the 640 growers who have lost contracts and on the terms for this year's contracts.

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The IFA has sought a payment of around €150/t, equivalent to five years of the malting barley bonus, for exiting growers.

Changes to growers' terms will also feature in the talks.

The company has stated that a penalty of €4/t will be imposed on malting barley that is above 20pc moisture. Barley supplied at under 20pc will receive a bonus of €1.20/t for every point below this threshold. A 9.3pc minimum has been set for protein, with 11.5pc the upper limit.

The IFA insisted that the €143/t secured by Scottish growers had to be the price benchmark for Irish growers.

Irish Independent