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Boortmalt squeezing Ireland’s maltings growers out of existence

Boortmalt now controls the Irish malting barley industry. Having driven home a two-year deal last month which places malting growers at a severe disadvantage, farmers might have expected a dismayed reaction from the IFA, but instead they got deputy president Richard Kennedy talking it up as follows:

“This week’s fixed price offer of €164/t represents a premium of €38/t over recent offers for spring feeding barley. Under the new deal, growers from this Wednesday and every Wednesday until mid-July, have an opportunity to participate in price hedging for both the 2017 and 2018 crop. The two-year window for hedging will give growers greater exposure to better price opportunities.”

Anecdotal reports that Mr Kennedy accepted the situation meekly in order to keep his plum job, just as Boortmalt local representatives overseeing yard closures have been forced to do, are difficult to argue with. The company has a virtual monopoly over the Irish malting industry and as usual in this country, no one in power will stand up to a bully.

So while Kennedy’s statement puts a rosy glow on the situation, growers feel very differently. They have already grumbled about the requirement to produce a 70:30 brewing/distilling split. This in itself is a terrible burden to place on growers and it puts unnecessary strain on farmers to meet protein thresholds well below normally acceptable European averages.

There are so many variables they cannot control such as weather, soil and nutrient absorption rates of the crop over the growing season. Protein is already hard to manage and it makes much more sense for the company to segregate the barley in-house according to its condition. But Boortmalt has found itself able to dictate its conditions without opposition.

The grain company formerly known as Minch Malt was run by Greencore for a number of years before Boortmalt stepped in and bought it up. As part of a rationalisation program the company has been steadily closing intake points and maltings across the south-east. Intake points at Castlebridge, Tintern, Stradbally, Emo and Rosenallis have all been closed. Banagher maltings, Tullamore and Borrisokane intake points are now closed, as are Monasterevin and Portlaoise. There are fears the company is planning to close Enniscorthy, which will be open for this year, but Bagnelstown intake point is certain to be gone after next year.

The Bagnelstown closure threatens the viability of malting barley for another swathe of Ireland’s growers. While the company has agreed to collect the barley this year, they will require farmers to pay for haulage either to Kilkenny or Athy from next year. Meanwhile farmers will have to provide facilities on which to tip the barley this summer, until it can be inspected and tested. If it then passes Boortmalt’s stringent criteria they will be allowed to have it delivered to the maltings. This is obviously going to impose more expense on farmers and more stress.

The proposals have been criticised by farmers but they have shown no resistance so far. The aggravating fact that they were not offered a chance to vote on how to respond, further underlines the way in which the IFA and Boortmalt seem to have colluded in marginalising maltings growers. It’s another case of divide and conquer. Other tillage farmers say, ah thank God it’s not us. But it most likely will be next time. The direction Boortmalt have chosen to go endangers a sector of Irish agriculture, and one with a long and proud history. It could have a bright future, if it were handled with care.

That’s Farming spoke with Noel Aughney, a malting barley grower from Bagnelstown. He voiced the frustrations of farmers.

“I don’t know what the outcome will be. The contract prices are similar to last year with a base price of €164/T. We might get €130-135 at best, as a feeding price. Adding on haulage charges will require further thinking. There will be quite a fall-out after this year.

“A lot of people around here have already dropped it completely, but as time goes on, it appears I’m slow, because there’s nothing wrong with the people dropping it.”

“It’s similar to what happened in Mallow with the beet. It used to cost me €2,000 to transport beet to Carlow. Then it was €6,000 to get it to Mallow. At a base price for barley I can’t see it being a runner unless something changes.”

Noel believes Boortmalt are merely biding their time with Irish farmers:
“It’s Hobson’s choice. I think it’s the same exercise as what we saw with the beet factory [in Carlow]. It looks like they want to wind up business in Ireland and withdraw their quota back to France.”

“It’s easy to see that all of this can be grown abroad and imported into Ireland. There was a time when you’d scorn at a farmer buying milk; when we thought there’d never be a shortage of Irish sugar; when you’d go to the local post office to post a letter. The governments here, one or the other, don’t seem to consider these things worth saying.

“We saw the same with the fertilizer industry. Gouldings, Albatros and NET in Arklow closed in the 90s because it was going to be imported for half the price. Now we are paying up to four times the price for fertilizer.

“The producer gets pinched both ways. Expenses are going up and prices stay the same. You have to go back 40 years for a comparison price to today, when barley was £100/T to the €164/T we are getting today.”

Noel thinks Boortmalt have been quite deliberate in their approach to Irish maltings:
“Boortmalt are used to having it their own way. Since they arrived on the scene they’ve carved it all away to give themselves complete power over the one thing they want, which is the barley. They have surrogated the expenses. They don’t want to deal with fertilizers and chemicals.

“I’d describe it as very clinical. They shop out the management of malting to local agents or merchants. They’ll make it so you can only grow one variety. They have the monopoly. They want the maximum of a product at a base low price. They’re very choosy. For example, European limits on protein are much broader than they would accept. The lower level of EU protein was 9.5-13. Boortmalt said you have to be 9.5-11. But the type of field, the weather and the variety you are growing all have inputs. There’s an awful lot you cannot control.”

Noel does think there is potential for Irish malting barley growers to supply what he calls “indigenous industries”:

“In the old days the Maltings were dealing with Irish Guinness Malt and Export Guinness Malt. Very little goes to Diagio now. I think O’Hara’s [Carlow Brewing Company] are on a winner. At the present time and they’re working their way into Spain. I heard they are hoping to close a deal that would be worth €1m. They’re hoping to secure 6% of the Spanish market. In addition, Walsh’s distillery in Royal Oak is positive story. The only thing that’s left is we’re going to grow it ourselves or it’s going to be re-imported into Ireland.”

 

Source: Thats Farming

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