Ill winds are shaking malting barley prices Grain growers claim collapse in trade justifies 10c cut on price of a pint
THE Irish Grain Growers (IGG) group has called on brewing giant Diageo to cut the price of a pint of Guinness by at least 10c given the collapse in malting barley prices.
Guinness cited higher malting barley costs as justification when the drinks’ prices rose in 2012 by 5c per pint, the IGG stated.
Now that the price of malting barley has fallen, the world’s most famous brewer should ensure the price of the pint reduces, the growers’ group argued.
The call by IGG is part of a wider campaign to highlight the poor returns malting barley growers received this harvest.
IGG launch their campaign today with a demonstration outside of Boortmalt headquarters in Athy.
The grain growers’ group has called for the current deal between Boortmalt and IFA to be “thrown out”, claiming that it is “just not working”.
IGG members claim that farmers did not get a chance to vote on the current deal, and that it had only limited support among malting barley growers.
“We will be calling on IFA to step away from negotiating on behalf of growers as they have led us to a situation where malting barley contracts are valueless and malting barley is no longer a premium crop to grow,” the IGG stated.
The IGG also claim the IFA had signed up to a Memorandum of Agreement including a code of conduct, which no grower had seen or agreed to.
“We are calling on the IFA to produce this Memorandum of Agreement to malting barley growers. All growers have the right to see the rules they are governed by in a contract.
“We are calling on them to stop this nonsense of a compulsory levy in contracts with Boortmalt,” the IGG statement added.
IGG want a minimum of €200/t for malting barley for brewing, and €220-230/t for distilling grade malting barley because of the crop’s tighter quality specifications and lower yields.
Pointing to Teagasc figures, the IGG claimed the economic cost of production for distilling barley at a yield of 6.5 t/ha is €282/t, and €244/t for malting barley at 7.5 t/ha.
This year Boortmalt paid a future price of €172/t for a limited amount of malting barley but the harvest base price was around €155/t. The average of the hedge price this season was €167/t.
Glanbia paid €169/t to co-op members for malting barley, and €155/t for non-members. Bobby Miller of IGG predicted that malting barley growers will probably make €70-100/ac on this year’s crop, excluding straw and direct payments.
However, if half a crop failed to meet the tighter specifications for the distilling-grade barley or malting barley then farmers could struggle to break even, Mr Miller maintained. Diageo stated that it has always been supportive of Irish farmers and farming in Ireland and will continue to be supportive.
However, it pointed out it does not buy grain from growers but purchases finished malt from the malting companies. It states the price of malting barley is a matter for growers and malting companies and added it does not set the price of a pint in pubs.
“As the largest buyer of Irish malt barley Diageo understands and appreciates the work by Boortmalt in conjunction with the IFA to protect growers from global price variances,” a Diageo spokesman stated.
“In addition it values the investment by both the IFA and Boortmalt in research and development to support farmers in growing the highest quality Irish malt barley.”
The IFA declined to comment.
Last year it stated that the part of the 38c/t levy that goes to the IFA is voluntary while the other half is spend on research involving Teagasc and UCD, and Boortmalt also contribute.