‘Our customers are quite happy with importing barley’

The standoff between farmers and Boortmalt continued last night (Monday, February 18) at the Teagasc malting barley conference held at the Clanard Court Hotel in Athy, Co. Kildare.

While Teagasc received some rap for facilitating the explanation of the pricing structure by Boortmalt at its malting barley conference, the head of Teagasc Crops knowledge transfer – Michael Hennessey – summed up the meeting in a few simple lines:

“Farmers are very united in what they think. We certainly found that in Co. Wexford as well. I think it’s reasonable looking down to say that there’s probably more talking to be done.”

Hennessey went on to encourage both sides to sit down and talk again.

He stressed that Teagasc’s role is to help farmers to deliver malting barley and achieve higher profits from that product through agronomic advice and research, adding that the body is not involved in price talks.

Farmers want answers

Many farmers were frustrated at the fact that text messages have been coming out in regard to deals, despite the fact that no explanation of a structure had been given. Some deals have been closed – yet farmers have not yet received the full details of the pricing structure.

Some claimed to be unaware of the offers made last week, while more were confused and did not fully understand the offers made on the text messages.

One member of the audience asked: “Offers are coming on text; there’s confusion about what’s being offered etc. When will the full terms and conditions of any supply proposal be available?”

Boortmalt’s response was that it was producing a ‘one-pager’ to describe the deal. However, many farmers have now missed out on an offer of €190/t, before this ‘one-pager’ or explanation has been given.

‘Irish malting barley is not a commodity’

Farmers were clearly unhappy at the use of the FOB Creil price as a reference for the Irish malting barley price.

One grower, who received a round of applause from the audience, stated that a premium needs to be paid for a product which is used in the marketing of major ‘Irish’ beer and whiskey brands.

Irish malting barley isn’t a commodity.

He explained that there should not be an argument over a premium being paid, but rather what that premium should be.

“We need to come to an agreement on what that premium should be. The reality is that the acreage [of malting barley] in this area has gone down significantly.

Boortmalt is going all around the country to try and find growers because traditional growers here have either exited the industry or, in my own case, I’m sowing 25% of the area of malting barley I was five years ago.

“What are we growing instead? We’re growing feed barley.”

He then described how winter feed barley was producing a higher gross margin than spring malting barley, according to the Teagasc publication of ‘Crops Costs and Returns 2019’.

Customers will buy cheaper produce; not Irish

Boortmalt told the attendance last night that its customers have stated that they will buy cheaper product from other countries if Irish barley is more expensive.

Pierre Eric Souplet – markets specialist with Boortmalt – answered many growers’ questions on the night. He explained why Boortmalt’s customers will import barley.

We have debated that many times and what we can say after the crop 2018 problem, and the fact that we are being obliged to input barley from elsewhere, our customers are quite happy with importing barley.

He continued: “The quality is better and at some point quality is talking and money is talking.”

Souplet stated that Boortmalt wants to continue to do business in Ireland, but the Irish farmer needs to “maintain a sustainable and efficient malting barley supply chain in Ireland”.

He explained that if “in the long run the Irish supply chain is not sustainable, because it’s too expensive” customers will import barley.

Souplet outlined what he thought were the positives of the new pricing structure.

“We have studied it in many ways; we think that offering you that market reference [FOB Creil] for wet, unscreened barley, delivered store, plus haulage, plus proteins bonus is a nice package – a very nice package. If you don’t like it I’m sorry sir,” he replied to one farmer.

Also Read: Boortmalt explains pricing structure…no agreement with IFA