Malting barley growers getting 1c from pint

Irish malting barley growers get just 1c in every pint of stout sold at €5/pint. This equates to 0.02% of the price*.

It is hard to believe then that Boortmalt has decided to pass its energy costs back to the farmer this harvest, which saw grain harvested at record low moisture contents.

These figures are based on the following:

It should be noted that in a year like 2022, where grain quality is so good, farmers are most likely receiving an even lower percentage as it takes less barley to produce 1t of malt.

Farmers also suffered serious weight loss in many cases as they harvested crops at moisture contents as low as 10%, which they are not rewarded for.

Many breweries also add feeding and roasting barley to the mix, which further reduces costs as these crops are cheaper to purchase than malt.

Double

So, if 1c was added to the cost of every pint, the price of malting barley to the grower could actually double.

Taking into consideration that the price of a pint of Guinness varies from about €4.10 to over €8 and that the price increases incrementally as it gets later into the night in many pubs, by as much as 30c per pint, 1c is not a lot to pass back to the farmer.

Malting barley is described as a premium crop in Ireland, but the reward must be worth the risk. For example, suppliers to Boortmalt – the biggest maltsters in Ireland and the world – must supply 30% of their barley to meet distilling spec and 70% to meet brewing specs.The harvest price is good this year and well above feed.

However, if grain does not make the specifications, feed price is received.

There is no set recipe to meet this target. There are many factors affecting the outcome such as seed rates, nitrogen rates and crop rotation. However, the weather is probably the biggest factor. Farmers have no way of supplying exactly 30:70 distilling and brewing barley and so risk not making the grade on much of their crops, which means receiving feed price for malting barley.

Weather also affects germination, another spec for rejection when below 98%. And this season specific weight or KPH was added to the specifications demanded.

Farmers face huge risks at present. Fertiliser and other input costs have soared.

Next year’s crops are being planted and tillage farmers do not know if fertiliser will even be available or at what price.

The average tillage farm income was €33,339 in 2020 and a rise in grain prices led to a figure of €58,995 for 2021. Grain prices have risen further since 2021.

However, input costs have also increased dramatically.

Looking to 2023, farmers are facing nitrogen prices of over €850/t at present. Nitrogen would have been below €200/t in autumn 2020 and below €400/t in autumn 2021. P & K availability may also be limited.

While the farmer gets just 0.02% of the value of the pint, Irish drinks companies base a significant amount of their advertising on Irish farmers and Diageo, for example, declared it wanted to see sustainability “from grain to glass”.

Sustainability is a big focus of all companies at present. It has three pillars – economics, environment and social. So, any talk of sustainability must cover all the bases.

Guinness has stated its “ambition is to work alongside Irish barley farmers to support them on the transition towards regenerative agriculture”. This is in its new Regenerative Agriculture Pilot.

The company has recently been handing out bags of cover crop seed to farmers. This looks good from a publicity point of view, but does Guinness know how those cover crops will affect malting barley protein content? Does it know how yield will be affected by using minimum-tillage establishment?

The Irish Farmers Journal has asked the company about this project on numerous occasions. At its launch in February it seemed like a positive move, but Guinness has not replied to requests for details on the pilot. Yet, advertising of that programme has been heavy on social media. We hope to update readers soon.

The company also failed to comment on an energy charge placed on growers to keep supply chain costs down.

While a lot of the barley used in brewing is Irish at present, a huge amount of grain is imported for the production of Irish whiskey.

The whiskey industry states it buys approximately 100,000t of grains from Irish farmers. It is estimated that over 120,000t of maize is imported for use in Irish distilleries. The proportion of price a farmer receives from a bottle of whiskey is therefore extremely difficult to calculate.

The industry is trialling the use of grains such as wheat and rye, to extend the use of Irish grain in its production, but a massive move away from maize seems unlikely.

The Teagasc National Farm Survey says tillage farms produce 2.2t of carbon dioxide equivalent per hectare and much of this is due to livestock on those farms. Nitrogen use efficiency is at 62.6% and phosphorus use efficiency is at 76.6%. These credentials have to matter.

*The calculations provided on this page are not exact, but give a good indication of malt production from barley and beer production from malt.