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Tuesday 24 April 2018

Grain Growers Association slam IFA/Boormalt deal and claim growers are returning seed

Boortmalt Ireland - Athy site.
Boortmalt Ireland - Athy site.
Ciaran Moran

Ciaran Moran

The Irish Grain Growers Association has hit out at a malting barley deal struck between the IFA and Boortmalt.

It said that the future of Malting barley growing is at risk due to what it described as a poor deal presented to farmers by IFA and Boortmalt.

It also claimed that growers have begun to return seed or inform Boortmalt that they will not be growing for them this season.  

IFA entered into a two year deal with Boortmalt which IFA Deputy President Richard Kennedy has said is positive and includes significant new measures.

Mr Kennedy said, “It is critically important to get a price out ahead of the planting season so that growers can plan their cropping programme accordingly. The fixed-price offer is currently ahead of that offered for new crop dried feeding barley for harvest 2018 collection”.

“The delivered farm seed price of €520/t across all varieties is significantly reduced on last season and is interest free until harvest. A free lorry collection service will be provided by the company to growers where branches were closed in recent years and where growers purchase, from Boortmalt, plant protection products to the value of €50/acre or greater (excl. vat) during the season.”

However, the Grain Growers association said the deal is restrictive and not capable of delivering the price margin needed.

“There is good demand for Irish grown GMO free feed crops and the price for malting /distilling Barley is simply too low.

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“The pricing structure currently on offer to Growers has no minimum price, this  sees the price effectively capped at €170 and the matiff led system would have to reach €185+ to see any further increase over €170.

“If the Matiff wheat price is  €171, malting barley  drops to €166, if the Matiff wheat price is €160 then growers get €160 this effectively means growers are being encouraged to sell in late €160’s thus effectively capping the price.

“Because malting barley is used as benchmark by merchants for the setting of feed grain prices, this deal affects all tillage farmers,” it said in a statement.

It also claimed that growers are being told they will get a bonus for distilling but as farmers decide to grow or not, the vague promise of a bonus is simply not good enough.

It also said that growers want to be able to carry out their own dealings without IFA’s involvement.

“No grower should be forced to pay a compulsory levy to IFA.

“The current deal which includes a Memorandum of Agreement that no grower has seen, must be scrapped before long term damage is done to the Malting Barley/distilling sector.

“It’s time for the Malting and Distilling sectors to pass on some of the benefits of the success in the sector recently to their growers and ensure  the supply of Irish Grain into the future and pay proper prices to growers.

“This deal does not guarantee Boortmalt a supply of barley next harvest because more attractive offers for barley may be available from other merchants,” it said.

IFA/Boortmat deal

  • Changes to 2-year deal
    • A number of positive changes have been made despite the fact that we are in year 2 of a 2-year deal
  • Model changes – at €170/t or below zero deductions on Matif milling what price (see attached table p2):
    • Net impact grower better off by
      • + €6/t when Matif is from €171 - €175/t
      • +€9/t when Matif is from €166 - €170/t
      • +€7/t when Matif is from €161 - €165/t
      • +€5/t when Matif is at €160/t or below
  • Contract 2018 – General
    • All barley purchased by Boortmalt for crop 2018 will be under contract
    • Retention of the current split of brewing/distilling contract per grower 70% / 30% “as is”
    • Potential for additional contracts to be awarded to all growers for Crop 2018
  • Contract 2018 – Brewing
    • Growers can hedge up to 75% and / or fix up to 20% of fixed and hedge contract tonnes
    • Fixed price offers to date
      • 1 €167.50/t
      • 2 €173.50/t
    • Further fixed price offers April and June
  • Contract 2018 – Distilling
    • Premium for distilling will be greater than brewing - negotiations ongoing
    • Protein level increased from 8.8% to 9.3%
    • Growers will be able to hedge up to 50% of their distilling contract
  • Seed
    • Delivered seed price of €520/t for all varieties, interest free until harvest
    • Accelerated delivery of new and improved seed varieties
  • Haulage
    • Free ex-farm haulage (via truck) for growers‘ grain where Branches were closed in recent years: Emo, Stradbally, Portlaoise, Monasterevin, Carlow & Bagenalstown
      • Conditional on grower spending a minimum of €50/ac (excl. vat) on agri-chemicals
  • Harvest Intake Depots
    • Athy, Ballykillan  (lorries only), New Ross, Doyles – Cooladine, Kavanaghs – Ballycarney, Daltons – Kilkenny
    • Tintern (new) & Stradbally Town & Country (new)
  • Contract Post 2019
    • Negotiations to commence post-Easter
    • Teagasc funded project to ensure that malting barley once more becomes the top performing cereal crop


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