Three weeks ago I was bemoaning the poor sugar beet crop we had just started lifting, predicting significant losses for growers and telling British Sugar they should, despite EU sugar reform and terms already negotiated, raise the price for next year if they wanted to secure supplies.
Well, it seems they read my blogs. Because yesterday news arrived that the price for this year will be guaranteed at a minimum of £20/t including any deliveries surplus to quota. For quota beet the expectation is that the average will be about £24/t. This represents an increase of almost £5/t compared with previous expectations. Furthermore British Sugar is considering issuing additional contract tonnage to replace what it has lost through growers not returning contracts.
Isn't it wonderful what can be done when there are alternative crops to grow that suddenly look more profitable than sugar beet? Notwithstanding all the restrictions imposed by Brussels that used to "tie their hands" the monopoly processor has found it possible to improve its offer even after last winters "binding" contract agreement. British Sugar has exploited the fact that beet has been comparatively profitable for many years and growers have had to put up with its take-it-or-leave-it attitude. Now the boot is on the other foot and it feels good.
Whether yesterdays increase will be enough to persuade growers who had already decided to give up growing beet next year or the year after to reverse their decision, only time will tell. It is, after all, a one-off arrangement for 2008/9 enabling British Sugar to revert to previous prices should the value of wheat and rape fall significantly. Meanwhile growers will enjoy the novel experience of British Sugar dancing to their tune rather than the other way round.