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Farmers supplying milling oats under contract for Tandragee based White’s Oats have expressed frustration at the current pricing mechanism used to remunerate growers.
It is understood that the annual contract guarantees a market outlet for oats post-harvest, but does not provide a guaranteed market price.
Instead, the contract uses the London-based LIFFE futures trading index for feed-grade wheat from July to September as the basis for setting a price for milling oats.
Additional premiums are then payable on meeting certain specifications such as grain moisture, kernel content and general milling quality.
However, growers argue that LIFFE feed wheat is traditionally lower than spot market prices in NI, and this has left them at a significant financial disadvantage in a year of escalating input costs.
Similar pricing issues developed last year, which meant that growers were able to sell feed grade oats at prices considerably higher than those returned to farmers under the contract.
Other concerns relating to farm quality assurance labelling have also been raised by growers in recent days.
Existing terms
The ongoing issues mean some are questioning the merits of growing oats under the existing contract terms.
“All the risk is placed on the farmer as opposed to a beneficial arrangement for both parties,” said one local grower.
A spokesperson for Fane Valley, the owner of White’s, said that the contract has evolved over the last number of years as a result of an open dialogue with growers.
“We value the relationships we have with growers and are always open to discussions and suggestions that could improve the ways we work with them in the future,” the spokesperson added.
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