The IFA has said that its malting barley committee’s decision to agree to Boortmalt’s grain drying surcharge of €12.50/t was one that was not taken lightly and that agreement was the outcome of negotiations to reduce the cost facing farmers.

Grain chair Kieran McEvoy told the Irish Farmers Journal that the committee had discussed the surcharge at length and that the IFA had managed to reduce the surcharge from the €15/t initially proposed.

The IFA had also successfully pushed for the provision of a grain quality bonus which helped tip the balance of the committee in accepting the decision out of necessity, said McEvoy.

“Over the years, the malting barley price and other arrangements have been agreed between Boortmalt and growers through the Malting Barley Committee,” McEvoy told the Irish Farmers Journal.

“While no one likes an extra charge being imposed, we are elected to negotiate and that can’t always be about just saying no.

“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.

Dry price for green barley

McEvoy explained that the decision to agree to the drying charge was made on the back of the reality that grain drying costs had increased significantly since the invasion of Ukraine.

From 2019 onwards, farmers had received the dried FOB Criel price for green grain but this increase drying costs had prevented Boortmalt from being able to offer this price arrangement to suppliers, he said.

“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,” the grain chair continued.

“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.

“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,” said McEvoy.