Tillage lobby group slams Boortmalt/IFA malting barley price deal

Grain merchants and large co-ops “must stop hiding” behind “the defunct” malting barley price deal recently agreed between Boortmalt and the Irish Farmers’ Association (IFA), an opposition tillage lobby group has contended.

With Irish grain prices now among the poorest in Europe, as EU-wide malting barley prices have decoupled from wheat prices, the Irish Grain Growers Group (IGGG) is calling on Boortmalt’s European management to “step in”.

While European dried premium malting barley is trading this week at €280/t, in Ireland the December contract for malting barley – which is tied to the French MATIF milling wheat market – is currently trading at €210/t.

As malting barley is used as a benchmark by Irish grain buyers, the IGGG has claimed that the deal between Boortmalt and the Irish Farmers’ Association (IFA) is placing “an artificial cap” on Irish grain prices – resulting in Irish tillage farmers “getting ripped off”.

Last month, a revised malting barley pricing structure was agreed between Boortmalt and the IFA.

Also Read: New malting barley price deal between Boortmalt and IFA

Under the new structure, it was agreed that farmers will be paid €10/t on top of the December 2018 MATIF price – up to €180/t.

This means that if the MATIF hits €180/t a farmer will be paid €190/t. If the MATIF price reaches €190/t, or over, farmers will be paid the MATIF price.

This is a change from the previous structure, where a reduction from the MATIF price was carried out.

Negotiations

However, in a statement, a spokesperson for the IGGG claims that the new structure is “defunct”.

Irish Grain prices are among the poorest in Europe. Feed grain is trading at stronger prices on the continent than what merchants plan to pay here.

“Remember, merchants will have the cost of importing this grain on top of the price they will have to pay for the imported grain.

“Boortmalt must now negotiate for a third time this year to reflect the true value of malting barley on the market in Europe,” the statement reads.

‘One-sided relationship’

The IGGG is warning that Boortmalt’s European management “must step in” and address how matters are being run in Ireland.

We demand transparency on how Boortmalt pays its farmers on the continent and in the UK. We demand transparency on how much malting barley is being imported by Boortmalt and what prices are being paid.

“Boortmalt has complete transparency over farmers’ area sown, inputs and outputs. Yet it produces a set of accounts each year that obfuscates its true commercial position meaning we are in a completely one-sided trading relationship,” the group contends.

The IGGG claims that the IFA has “perpetuated this imbalance” over the last decade or more.

“Are we Irish the only ones using the MATIF system, getting repeatedly ripped off year-on-year and thus distorting the whole Irish grain market?

Malting barley growers are sick to the teeth by the way Boortmalt in Ireland is being run – an industry the farmers helped build. They deserve better.

In the statement, the IGGG again called for a minimum price of €250/t for malting barley in order to reflect European trade prices.

“This in turn will rise all Irish Grain prices. Merchants, especially the large co-ops, must stop hiding behind the defunct Boortmalt/IFA deal,” the statement concluded.

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