Deal agreed: Boortmalt and IFA reach deal – €195/t to be offered tomorrow

The Irish Farmers’ Association (IFA) and Boortmalt have finally agreed on a pricing deal for the current season’s malting barley crop.

Negotiations over the past number of days have resulted in the malting barley committee coming to an arrangement over price with Boortmalt.

The deal

The deal will see Boortmalt make a fixed price offer of €195/t tomorrow (March 27) which growers may take on up to 20% of their contracted tonnage.

The remainder of growers’ contracted tonnage will be calculated from the average of the Free On Board (FOB) Creil price for two-row malting barley (July 2019 price).

It should be noted that this FOB Creil price is a base price and will be paid at 20% moisture content. This price is paid at 14.5% moisture content on the continent.

This means that growers who have already fixed 20% of their tonnage at €230/t (which was offered in September) and who take the fixed price offer tomorrow – which is understood to be a hedge – can have an average price of €212.50/t on 40% of their barley.

The average of the FOB Creil from week 15 to week 38 (April to September) will then be used to calculate the remainder of growers’ contracts. All growers who wish to sign up to the deal must sign their Boortmalt contract by April 4 (note change of date from originally published article).

The FOB Creil price stood at €188/t at close of business yesterday (March 25). This means today’s offer of €7/t above the current FOB Creil price.

Growers who do not meet specifications or yield potential will not be penalised on the average of the FOB Creil price.

However, if a grower takes the offer of €195/t tomorrow on 20% of their tonnage that barley must be accounted for in the market.

Growers who took a price of €188/t – which was offered last Friday – are now committed to that price.

Protein bonus

Growers who supply barley for distilling 9.3% or less will be paid a bonus of €10/t on top of the base price.

Growers whose barley is above the specifications for brewing of 10.8% may supply barley up to 11.8% protein content. €10/t will be deducted from the base price for barley between 10.8% and 11.8% protein content.

IFA advising growers to take the offer on the table

Speaking to AgriLand Mark Browne stated: “The committee has agreed a deal today.

The committee is pleased that we’ve reached an agreement and they’re happy to recommend this agreement to their growers in 2019.

Browne commented that it is important growers know where they stand as they plant their crops and added that the committee are pleased to move to the FOB Creil price, which is malting barley as opposed to the MATIF wheat price which was in use last year.

“We’re happy that there’s a deal in place as farmers are planting a crop and know what price they will be getting for 2019.”