AgriLand met with Boortmalt earlier this afternoon (March 11) and the company explained that it is in continuing contact with the Irish Farmers’ Association (IFA) in regards to the pricing structure for the season ahead.
The company explained that it thinks a good deal is on the table.
Also Read: Malt pricing examples…new Boortmalt structure explained furtherA detailed report of the visit will follow on AgriLand in the near future.
During the visit, the company detailed how it wishes to increase the area under malting barley across the country and bring the crop back to regions where it is no longer grown.
The expansion of the maltings in Athy, currently with An Bord Pleanala, will go ahead – according to Boortmalt – and many parts for that plant are already on the existing Boortmalt site and ready to go when the time comes.
Deal rejected
Members of the IFA rejected a pricing structure put forward by Boortmalt in February and asked for a minimum price of €200/t to be paid for their product.
That deal uses the FOB Creil (two-row malting barley) as a reference price. Farmers can sign up to a contract to take an average FOB Creil price over a period from April to September; where a contract is signed the risk is taken away from the farmer who, if they do not meet their potential yield, will not be penalised.
Farmers may decide not to sign a contract and hedge barley throughout the season or take the harvest price. However, any hedged barley would have to be accounted for in the market, so there is more risk involved if barley does not meet specifications.
Clock ticking
The average FOB Creil price – in the deal mentioned above – is to be gathered from weeks 15 to 38 of the season, so the clock is ticking. Contracts will have to be signed before this time if farmers agree to the structure.