Confusion has surrounded the new Boortmalt pricing structure since growers received two text messages with two different offers on Monday, February 11.

On Monday night (February 18), Pierre-Eric Souplet, a markets specialist with Boortmalt explained four different selling scenarios to growers at the Teagasc Malting barley conference.

While many growers rejected the offer of €190/t last week, a number of growers missed out on the price offer of €190/t amid the confusion. These examples may help to clarify the issue at hand.

‘Farmers 100% committed’ – example 1

The first example describes a situation where a grower commits 100% of his/her malting barley area to Boortmalt. AgriLand understands the contract will need to be signed by the middle of March.

In the example below, the farmer expects to have 1,000t to sell from a given area.

If this farmer does not reach the potential yield of 1,000t he/she will not be penalised. If the grower supplies more than the expected 1,000t, Boortmalt will pay the harvest price for that surplus barley.

In the first example the farmer fixed a price of €230/t for 20% of his/her contracted tonnage. The price for the remaining 80% will be calculated as the average FOB (Free On Board) Creil malting barley price from week 15 to week 38 of the year.

Data source: Boortmalt

‘Farmers 100% committed’ – example 2

Example 2 is similar to above. Farmers must sign a contract by the middle of March. Farmers will not be penalised where they do not reach the potential yield and deliver potential tonnage. In the case of a surplus at harvest, they will also have priority to sell and will be paid harvest price for that surplus grain.

However, in this example the farmer took the offer of €190/t (offer from February 11) for 10% of his/her contracted tonnage. Having already availed of the offer of €230/t last September the grower has now fixed 300t at an average price of €216.66/t.

The price for the remaining 70% will be calculated as the average FOB (Free On Board) Creil malting barley price from week 15 to week 38 of the year.

‘Farmers not committed’ – example 1

Where a grower does not commit his/her barley to Boortmalt the producer may sell at spot prices throughout the planting season. These spot prices will be offered at Boortmalt’s discretion.

The farmer will take the harvest price for any barley that has not been sold at spot prices during the growing season.

Where a farmer has surplus grain in this situation, that grain will not be a priority – this will be given to “100% committed farmers”.

Farmers not committed – example 2

‘Farmers not committed’ who do not meet specifications – and therefore do not provide the tonnage – or have oversold at harvest must account for the difference. Where “farmers not committed” sell grain, this grain must be delivered or else accounted for in the market.