Opinion: credit where it’s due to Boortmalt and Tirlán

The National Malting Barley Conference took place in Enniscorthy last Friday. It was a specialist conference in the heart of barley country.

The Riverside Hotel, which hosted the event, sits in the shadow of Vinegar Hill, where a battalion of maltsters, and as many farmers who grew barley, fought in 1798 with the United Irishmen against the British Army. It runs deep around here, on the banks of the Slaney.

The conference was organised by Teagasc, in conjunction with Boortmalt. Jointly, they are running a research programme to improve the quality and the profitability of our malting barley.

Speakers included Eoin Lyons, who has fronted the project for Teagasc, and shared some of his findings on trial plots.

One key piece of research concerned planting methods. It showed that minimum tillage could perform as well as a plough-based system. However, direct-drilling was a relative failure.

This was not news to me, as the site was my neighbour John Crowley’s, and the direct drilling was done using our own drill. It was nice of Eoin to thank me for assisting the project, but hardly the best advertisement for direct drilling.

In fairness, it’s not the drill’s fault, as Eoin acknowledged.

It's not recommended to move from plough and till to no-till in a single bound. Min-till is the intermediate stage, and must continue until the land is friable without being worked. Otherwise, it will be too cold and damp in the spring for good establishment. Cover crops are vital in this process. Direct drilling works fine with beans and in autumn planting, we have found. The journey continues.

The journey

The journey for Boortmalt in Ireland is now entering its second decade. In that time, it has invested in more than the joint programme.

The maltings in Athy have been transformed, helping Boortmalt to move from fourth to first in the world in terms of volume, with 3m tonnes of malting barley across many countries, Jeff O’Connor, Boortmalt’s Agricultural Business Manager, told us. Boortmalt has increased the tonnage it buys in Ireland almost threefold in just 10 years.

Rebecca Bayley has now joined the project, and presented research on the importance of good establishment to ensure enough tillers to provide a good crop. Richie Hackett presented research on the use of protected urea as a nitrogen source. Fertiliser timing and levels are vital to ensure the barley is within the required range of protein for either brewing or distilling.

Jeff O’Connor also confirmed that Boortmalt would this year be sourcing barley through “preferred merchants”. This adds a link in the chain, from farmer to merchant to Boortmalt and on to the brewers and distilleries around the country.

The contract growers have is still backed by Boortmalt, with the same pricing structure measured against the FOB Creil price in France. Long may this continue, it delivered a superb price last harvest.

New dynamic

The structural changes caused some angst among growers last year, as did the “harvest surprise” of a €12/t drying charge. The relationship between Boortmalt and the IFA, which formally represents growers collectively, was at an all-time low.

I expressed the hope that relations would improve, and it seems they have. At the Diageo malting barley awards in the Guinness storehouse, Peter Nallen spoke of Boortmalt’s commitment to working with growers and specifically the IFA to progress the sector. IFA president Tim Cullinan, director Damian McDonald and policy director Tadhg Buckley were all present, and Cullinan echoed Nallen’s optimism for the future.

I haven’t been at these awards since I was a finalist over 20 years ago, but I’m pretty sure that the IFA’s front bench don’t normally attend; it’s usually the grain chair.

There will always be issues to address at harvest. Every year brings different challenges, with quality and quantity of barley varying depending on the vagaries of the growing season and harvest conditions.

Good relations and mutual respect and trust are essential to address these issues on the hoof at the busiest time of the year for farmer and intake alike. It’s good to see both sides making a real effort to build relations

Co-op stands up

Speaking of credit where it’s due, I have to refer to the changes to the fixed-milk-price schemes announced by Tirlán this week.

I devoted an entire previous column to a meeting last October of farmers affected by fixed-milk-price schemes. I reported the mood of the meeting and the testimony of those present. I was critical of some aspects of Tirlán’s response to the plight of farmers with as much as 85% of their milk fixed at prices rendered unviable by the changed cost structure of 2022.

Tirlán representatives met me and talked me through their perspective on what was a very difficult and complex situation, which was carried on the following week’s paper.

Further adjustments were made to the supports in the leadup to Christmas. Farmers were unhappy with those proposals, and met in Kilkenny in early January. They also made their presence felt at the round of meetings Tirlán held through mid-January. I reported on those meetings in this column.

This has been a long, drawn-out saga. It was around this time last year that it became obvious that fixed price milk was on the wrong side of costs, as fertiliser, feed and fuel prices hardened at unprecedented levels. The co-op issued its first response package in April, a package that it costed at around €25m. And now, 10 months later, a further and I would imagine final proposal offer has come.

The difference

What’s different this time is that the chief request from affected farmers has been listened to and acted on.

The maximum proportion of milk any farmer will have in Fixed Milk Price Scheme 17 (FM17) is 35%. In addition, the proportion of milk any farmer will have in the Fixed Milk Price Support Scheme, the scheme created to alleviate those farmers with high amounts of milk fixed, will be 35%.

It goes further; for the maximum percentage of milk any supplier will have in FM17 and the Fixed Milk Price Support Scheme combined is 35%. Any milk any farmer has above those levels will be cancelled. The Fixed Milk Price Support Scheme is now much more attractive to farmers, and remains open until mid-March for applicants.

Complicated scheme but simple truth

The supports are complicated; the Fixed Price Support Scheme pays a higher price for milk moved into it from an array of fixed schemes, not just FM 17 but three other preceding schemes, which all ran through 2022 and all ended last December.

The price was 40c/l for 2022, compared to the original 31c/l to 32c/l. However, milk was committed for 2023 and 2024, with a supported price of 38c/l in 2024, and 32c/l for this year.

In addition, an ingenious Input Support Scheme was paid on all Tirlán’s milk. This was on top of base price - fixed or floating - and averaged 4.5c/l through 2022. It continues for the first six months of 2023 at least, and is currently worth 6.5c/l. This means the absolute base price for Tirlán milk is currently 38.5c/l. A third element of support was an interest-free loan of 5c/l, which will be repaid in 2024 and 2025.

While the supports are complicated, there is a simple truth which must be acknowledged this week - Tirlán has stood by its suppliers in their darkest hour. In doing so, it has lived up to the co-operative ideals.

Tirlán has met and passed its first acid test as a co-op

It’s a show of solidarity from the 11,000 shareholders of the co-op to a few hundred of their fellow shareholders. It’s a demonstration of genuine leadership from the board. Senior management have worked tirelessly for a year to deliver a package that will, in my opinion, save farms. It’s been a long journey, and some of the steps have been halting, but the final outcome is a credit to all concerned.

I have covered this story closely, and the key players have gone up in my estimation. In Tirlán, that’s the chair John Murphy and his board, its CEO Jim Bergin, and Sean Molloy and Brian Hanafin, who oversaw the fixed milk price schemes and the supports. For me, Tirlán has met and passed its first acid test as a co-op.

The role of the IFA in advocating for farmers who were exposed should also be acknowledged. The two public meetings where farmers worst affected met and found solidarity and comfort in sharing their experiences were chaired by president Tim Cullinan with director Damian McDonald by his side.

Dairy chair Stephen Arthur and his committee worked behind the scenes, advocating for the supports to be tailored to address the unique circumstances that prevailed. They are aided in no small way by executive Karol Kissane, who is now an expert on the most arcane aspects of some very complex pricing mechanisms.

Waterford chair John Heffernan led an ad-hoc group of Tirlán suppliers from that county with a calm and gentle authority. Those suppliers, many of them young farmers and new entrants, were at the core of the campaign gaining the momentum it eventually attained.

Big Dairy a myth

There is a deeper underlying truth in all this. This would not have happened in many other businesses. It’s hard to imagine that a plc would stretch the way Tirlán co-op did. In fact, Kerry suppliers with a lot of exposure to fixed-milk-price schemes are deeply disappointed at the lack of action from either their plc processor or their co-op.

Some would have you believe that there is something called “Big Dairy” operating in Ireland. I’m not sure exactly what the term means exactly, but it evokes giant multinationals (“Big Pharma” or banks “too big to fail”) operating purely in their own narrow interests.

The Irish dairy sector has some very big processors, but with the exception of Kerry Group, they are all co-operatives, entirely owned by small shareholders, most of whom had or have a trading relationship with their co-op.

The average dairy farm is still a family farm, milking about 100 cows, on a farm size of 60ha (125 acres in old money). There are some very big farms, but there are also very many 50-cow herds milking happily away.

I’m not personally a fan of “platforming”’ where dairy farmers build a number of separate bases, but perhaps it’s just the 21st century equivalent of where a family would expand to create a viable holding for each of a number of siblings. We need new blood in farming, and we need new blood from outside the cohort of people who own farms.

The Irish dairy sector has issues it must confront, in particular around the carbon and biodiversity footprint of expansion. However, it’s a profitable model of family farming, harnessing the natural resources of climate and land quality to deliver product that is used in a bewildering variety of food products for ordinary families in every country in the world.

I’m proud of it, and I’m proud to be a Tirlán shareholder.