Farm Ireland

Sunday 22 July 2018

Glanbia Ireland announces 2017 grain pricing

FarmIreland Team

FarmIreland Team

Ireland’s largest buyer and user of native Irish grains, Glanbia Ireland, has confirmed a harvest 2017 green grain intake of almost 190,000 tonnes.

Glanbia Ireland Chairman Henry Corbally said that Glanbia fully appreciates the challenging situation facing Irish grain growers given the continued weakness in the world grain market.

“Glanbia is committed to helping our grain growers through this challenging period of over-supply in global grain markets. We have today announced a set of strong grain prices to support our grain growers.”

Harvest prices from Glanbia Ireland for 2017 are set out in table 1.

Henry Corbally added: “Our strategy for a number of years has been to move as much grain as possible out of commodity markets and into premium niche categories. Almost 40% of our total intake now attracts some level of premium or bonus; this is worth around €2m in total to growers compared to the equivalent non-contracted grains. This is a far higher proportion of overall grain contracted than any other buyer in the country.”

“For example, across all contracts, the weighted average price paid for barley to Glanbia Co-op members this harvest is €160 per tonne (including transport).”

Glanbia also offer growers regular opportunities to avoid market volatility by selling forward. Henry Corbally said that, for harvest 2017, 20% of grain was sold forward prior to harvest.

Glanbia has become a very significant purchaser of beans, demonstrating a commitment to sourcing native protein as well as enabling growers to increase their drawdown of the EU protein subsidy and improve their crop rotations.

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In order to assist growers, the Board of Glanbia Co-operative Society has confirmed a number of measures to support member growers:

  • In light of the very challenging year for growers, the Board has decided to pay Co Op support of €14 per tonne to Members for green and dried green from harvest 2017.
  • As part of the 2017 Member Support Package, grain grower members will be paid a rebate of €7 per tonne on all fertilizer purchases from Glanbia

New “Delivered-in” pricing model from 2018

Glanbia Ireland has announced that grain pricing for harvest 2018 will be on the basis of direct delivery to a drying location. This will involve the harmonisation of transport allowances across the Glanbia Ireland intake structure in a transparent manner.

At present, Glanbia operates 40 grain intakes points, of which 16 are drying locations and 24 are intermediate intake points.

Under the new policy, growers will be paid a transport allowance for delivery of their crop to the appropriate drying location. The allowance will be based on distance bands from the drying location. “Intermediate” local intake points will remain available but crops delivered to these intake points will not qualify for a transport allowance.

Glanbia Ireland’s tillage team will be engaging with growers on a one-to-one basis to ease the transition to the new arrangements.

Glanbia Ireland Chairman Henry Corbally said: “In partnership with our growers, we plan to maximise the proportion of the future harvest that is delivered to drying rather than intermediate locations. This will remove inefficiencies from the system and enhance the quality of our products, which should help us maximise market share for native grain.”

All 2018 prices quoted will include a standard transport allowance of €3 per tonne, with higher allowances paid for growers located greater than 15kms from the relevant drying locations.

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