The Irish Farmers’ Association (IFA) has said that it “reluctantly accepted” a €12.50/t drying and energy charge being imposed on malting barley growers by Boortmalt.
The association negotiates annually with the country’s largest producer of malt on behalf of farmers.
IFA National Grain Committee chair, Kieran McEvoy told Agriland that they clearly impressed on the company that the charge should apply for this season only.
The surcharge will be deducted from the final average Free-On-Board (FOB) Creil grain price which will be set in September; it will not apply to forward sold barley.
A moisture bonus of €3/t per point under 19.5% will apply to all barley supplied, up from €2/t the previous year.
It is understood that Boortmalt will also apply a 50c/t bonus for each point on the kilogramme per hectolitre (KPH) scale above 64.
A grower’s view
Art Murphy is a tillage farmer in the Ferns area of Co. Wexford whose family has been growing malting barley for generations.
“It is part of the religion in this particular area, it is renowned for growing quality grain,” the farmer, who has land in Ballycarney and Bunclody, told Agriland.
Although tricky to grow, Murphy said that this year’s malting barley yields are among the best they ever had. 70% of his Boortmalt contract is made up of brewing grain, while the remaining 30% is for distilling purposes.
In 2021, Boortmalt accepted distilling barley from Murphy with a protein level of up to 9.3%. This was under derogation, which applies when low-protein grain supplies are down.
Murphy aimed to bring his crop in under that level this year.
When the grower delivered his first load of 2022 he was informed that distilling grain was only acceptable up to 8.8% protein. As it turned out, none of Murphy’s distilling grain was under that limit, however, his brewing crop was accepted.
“I’m very disappointed about the goalposts being changed by Boortmalt at the last minute. We [growers] did not know about this until we went in with our first load of grain,” he said.
Murphy said that growers were also surprised to learn that Boortmalt will be imposing a drying and energy charge this year.
“Nobody that I know had heard anything about it until that day; again it was very very unfair. I finished my harvest last Friday (August 12), I was cutting moistures down as low as 8%,” he added.
Murphy said that instead of imposing a deduction, growers should be rewarded by the company for the barley they have produced this year.
“I would like to see the €12.50/t charge reversed to at least €20/t extra paid to growers this year for the extra-dry grain which was sent into them [Boortmalt].”
The farmer said that due to the rejection of his distilling crop and the imposition of the surcharge he will suffer a “considerable financial loss” this year.
Murphy added that the IFA never contacted growers in advance to inform them that a drying charge would be applied this year.
Kieran McEvoy said that Boortmalt had signaled two months ago to IFA that it was seeking to impose a €15/t drying and energy charge on growers.
He said that the IFA worked with the company to reduce that to €12.50/t, adding that no announcement could be made until negotiations with the company concluded, which only happened last week.
“Just because it was agreed, doesn’t mean that we are happy. It was reluctantly accepted,” he commented.
The IFA had asked Boortmalt for a derogation on barley specifications but it was told that such a measure does not apply in a year where there is a sufficient supply of low-protein barley.
McEvoy added that it is hoped the intake for Boortmalt at Dalton’s in Athy, Co. Kildare is expected to resume on Wednesday (August 17), it is understood that efforts are continuing to resolve a drying issue at the site.