Boortmalt has been a force for good since arriving on the Irish agriculture scene in 2010. It has invested heavily in its maltings facility in Athy, and has continuously expanded the tonnage of malting barley it purchases following significant contraction over time when Greencore ran the business.
That said, Boortmalt has a remarkable propensity for antagonising its growers, often over relatively insignificant matters. This year’s issues include strict protein limits and the “August surprise” of an energy charge. Farmers are only discovering the arrangements in place when they cross the weighbridge with barley. It isn’t ideal.
The way Boortmalt has been evolving its Irish business suggests it will in time completely remove itself from direct dealings with farmers. It has closed and sold intake points, and has contracted independent merchants to assemble grain to specification. Some of this is in areas as far from Athy as Cork and Donegal.
To a degree, Boortmalt is emulating what Guinness/Diageo did in the 1990s. Previous to that, farmers growing malt barley held contracts directly with Guinness. Guinness jettisoned all the smaller independent intermediate merchants. The contracts of the farmers who supplied them were then liquidated. Minch Norton (which became Greencore grain, then Boortmalt) became the sole assembler, and farmers’ contracts were with it rather than Guinness/Diageo.
More links in the chain
Will the introduction of more links in the chain create the efficiency of specialisation, or would it push farmers ever further from Diageo?
In the meantime, growers and Boortmalt must work to streamline their negotiations process. The non-grain farmer might wonder why farmers continue to grow for Boortmalt at all. The answer is simple. The price it pays for barley is often the best in the country. Every year, it leads the way with a malt barley price grounded in the FOB Creil malting barley price, which is proving a reliable underpin. That in turn sets the market for Irish malting barley.
So what could be done? Firstly, this is no time for final talks over contractual issues and harvest arrangements. Farmers and presumably maltsters who buy grain are busy enough in July and August. The arrangements for 2023 should be in place before any grower undertakes to supply grain next year.
As soon as the harvest is over, both sides need to agree a contract. The issues won’t change. Some flexibility on both sides will be needed as issues arise during harvest, but that is more likely if the basic agreement has long been put to bed.
Secondly, those farmers who sold forward last year need to be offered a chance to catch the high prices they have missed out on. A forward selling opportunity is needed by Hallowe’en at the latest.