Grain growers have agreed to progress negotiations with Kerry Agribusiness on a possible forward price contract.
A meeting organised by Kevin Leahy, chair of the Irish Farmers’ Association (IFA) Kerry grain committee, heard that this is the first time such an option could be offered to growers by the company.
Leahy said that the IFA had been in discussions with Kerry Agribusiness given the difficulties being experienced by tillage farmers due to rising input costs.
Although the negotiations are very much in their infancy, Leahy outlined to growers what the forward selling contract may look like. This included that a grower could offer a maximum of 20% of their total produce from the previous year under the agreement.
Leahy explained that the contracts could be offered on feed barley, wheat and oats under current specifications.
The price agreed would be final and the IFA representative said that he would be seeking to have bonuses included in the agreement.
National IFA Grain Committee chair, Kieran McEvoy, who supplies Glanbia, told the meeting that he has been forward selling since 2009 adding that he has “got it right and got it very wrong”.
McEvoy said that forward selling limits some of the risk but advised that it was not an option for everyone as each farmer has their own costs.
Although some concerns were voiced about forward price contracts in general, the farmers at the meeting said that they would be open to the option in principle but would need to see the price and full terms offered by Kerry Agribusiness before signing up.
It is understood that both parties are to meet again on the matter in the coming weeks.
Meanwhile, Leahy added that many tillage farmers are very worried about fertiliser this year but said that Kerry Agribusiness had assured him that they have sufficient fertiliser stocks.
Kieran McEvoy told the meeting that this is a year to manage risks as best farmers can. He warned that growers were potentially “on the edge of a perfect storm” if prices fell and there was bad weather coupled with the high input costs.
“It’s a big game of poker to play this year but we have to remain optimistic and stay going,” the IFA chair noted. In terms of fertiliser, Leahy advised farmers to “put out what’s needed” and follow soil sample results.
Max Potterton, IFA tillage executive, also told growers that they should aim to start securing 30-50% of the fertiliser needed for this year.