Facing into its responsibilities

By Matt Dempsey

The grain price proposed by Glanbia to its Board this week was an error of judgement. We understand that a price of €124 a tonne, less than £100 in old money was proposed. The Board rightly rejected the proposal and it is back to square one.

Glanbia is by far the largest grain grower in the country, spanning as it does much of the grain growing areas - stretching from Meath and North Dublin, to parts of Cork, it has a thriving and profitable input supply division servicing grain growers.

This year's harvest, for many, has been a nightmare, we have reports of foreclosures and extreme stress. We do not want to dwell on the extremes but on the norm. And the normal tillage grower has been badly affected by incessant rain.

Moisture and quality have been affected, costs have risen very sharply. In these circumstances, it is legitimate to expect the largest buyer to behave responsibly with a commitment to long term suppliers and customers. Harvesting at high moistures, farmers do not have the luxury of tipping grain in a shed for a few weeks while deciding how to maximise the price. Some will be able to roll and treat with a good preservative but on most grain farms drying capacity - if present will be flat out. The bulk will be moved on as quickly as possible to local intake points.

We need more developed channels to encourage grain to move directly from farmer producers to farmer users, we also need to be aware of the futures markets and forward prices offered by some merchants - notably to their credit by Drummonds but that is for the future. Deals have been done this week at €140 a tonne plus 20% VAT, we have reports of Glanbia assuring some growers of a minimum of €10 a tonne over their publicly announced price - whenever that comes.

Nobody disputes the fact that the mainland European harvest is far higher, as is Britain's. While a huge Ukrainian harvest grown with the aid of imputs forbidden in the EU is undermining normal outlets. Ireland is a large net importer of grain and animal feedstuffs. Increasing this dependence on imports unnecessarily will do nobody any favours. Glanbia, whether they like it or not, are national price setters for grain. Long term responsibility must not be submerged by short term opportunistic profit maximisation.