IFA Grain Chairman Kieran McEvoy said the elected representatives of the Malting Barley Committee discussed the recently-announced drying surcharge for Boortmalt suppliers at length, and a decision to agree to the charge was not taken lightly.
“The FOB Creil market is based on a dried market price. Since 2019, the arrangement between Boortmalt and IFA has been for growers to receive this price for green, wet barley. However, the war in Ukraine has sent the cost of gas and electricity used in drying grain to unprecedented levels and Boortmalt representatives indicated the payment of a dried price for green barley was not viable for harvest 2022,” he said.
“The initial proposal from Boortmalt was a €15/t deduction from the FOB Creil contract portion but over a period of negotiation, this was reduced to €12.50/t with a €3 per point moisture allowance and a new KPH bonus,” the Chairman continued.
The deduction does not apply to the two forward price offers.
“Over the years, the malting barley price and other arrangements have been agreed between Boortmalt and growers through the Malting Barley Committee. While no one likes an extra charge being imposed, we are elected to negotiate and that can’t always be about just saying no,” he said.
“We believed it was better to have an agreed outcome with a transparent drying charge rather than having the price link to FOB Creil undermined,” he said.
Since April, the FOB Creil malting barley market has traded between €358-€475/t, with the rolling average currently sitting at €415/t. There are six more weeks to go until the final average price for this contract will be known.
However, indications suggest a historically high price will be paid to Irish malting growers which is badly needed given the increase in input costs,” he concluded.