Growers of malt barley unhappy with prices

Grain farmers who grow malting barley used to manufacture Guinness and other quality Irish drinks have threatened to export their…

Grain farmers who grow malting barley used to manufacture Guinness and other quality Irish drinks have threatened to export their grain to France this year in a row over prices.

The chairman of the Irish Farmers Association's grain committee, Colum McDonnell, warned that the barley crop could be sent abroad this year unless farmers got a realistic premium at home.

He claimed Diageo and Greencore Malt had been "creaming off" as much as €8 million from malting barley growers.

"Irish maltsters and brewers are failing to recognise market reality by discounting malting barley prices by over €50 a tonne, taking €8 million out of growers' pockets," said Mr McDonnell.

READ MORE

"For example, French new crop export prices, traditionally the lowest in the market, have moved to €198 a tonne in the last week, while Scottish growers are being offered €180 a tonne for green malting barley," he said.

"Traditionally, Ireland has paid a premium of €20 to €25 a tonne over French malting prices. This season, Greencore Malt's offer is €50 a tonne below French prices."

Mr McDonnell said this April had been the hottest on record in many parts of northern Europe. The weather had had a negative impact on crop development and limited the yield potential of many of the spring barley crops.

Rains over the last few days had eased concerns somewhat, but some growers had ploughed down malting barley and sown the fields for maize, he claimed.

"In recent days, I've heard of increased activity in the market, with brokers actively seeking supplies and offering €190 a tonne to export malting barley."

He said the concentration of buying power in recent years had enabled major buyers to force the hand of growers into accepting less than the prevailing price.

"My advice to growers is to seek out the best price before committing to any deal," Mr McDonnell added. "In the past, the main buyer has exercised a stranglehold over growers by insisting they buy their inputs in order to secure a malting contract. This practice is clearly anti-competitive."