There have been two big announcements from British Sugar this week.

They’ve unveiled details of a so-called groundbreaking deal which basically sets the price growers will be paid for their beet before being asked to sign contracts. That price will be about £24.50/t for 2011, which is actually less than the £26/t that growers and the NFU fought so hard to get for this year.

The second big announcement concerns BS’s outgoers scheme, which is giving those growers with lower yields the chance to get out of beet and reallocate contract tonnage to farmers who can achieve higher yields.

A fixed price may remove the uncertainty of the annual ‘bun fight’ between the NFU and BS - but my worry is whether it's been set high enough. Frankly, it might not be worth growing beet at £24.50/t.

£24.50/t seems like a high price - or should that be low price - to pay for a bit of stability. It seems only yesterday that the NFU was calling for £34.50/t and arguing that growers would be forced out of business if they did not get it.. Admittedly costs have come down a bit since then. More importantly, so has the price of wheat, so stacked against the alternatives, sugar beet will still make sense for a sufficiently large number of growers to fill the factories. At least, that's what British Sugar will be hoping.

Phil,  I can't believe what a push over you are !  Honestly the best minds in the business, Brown & Co, Nfu, some amazing formula that no one knows about, months of calculations followed by...................wait for it (!)        A PRICE CUT ...............  I can't rember when I have ever seen such a first class example of "management by commitee".

Just received something from British Sugar confirming the exact beet price for 2011 - it's £23.60/t. That's some way below the £26 for 2010 and less than people expected when they announced their "groundbreaking" contract - apparently due to the weakening of the euro during their reference period earlier in June. It's certainly a way below the £30/t the NFU was asking for not so long ago! Article appearing on FWi shortly...

Well, if the best farmers can do is have a meeting in Peterborough to throw some toys out of the pram, but essentially just carry on then BS must be quaking in their boots.

I dont see the point in comparing the price to wheat given that wheat is by far away not the most profitable combinable crop. You have to really love mud and compaction to grow at £23.60 unless your land is just sand.

Paul Spackman:

Just received something from British Sugar confirming the exact beet price for 2011 - it's £23.60/t. That's some way below the £26 for 2010 and less than people expected when they announced their "groundbreaking" contract - apparently due to the weakening of the euro during their reference period earlier in June. It's certainly a way below the £30/t the NFU was asking for not so long ago! Article appearing on FWi shortly...

Indeed, after all the fanfare about the new sugar beet deal being best for farmers and British Sugar, it appears the Euro has got in the way. In the last week alone Stirling has strengthened by by over 2.5 Eurocents to the Euro and now sits at £1:€1.235, levels not seen since Novermber 2008!

 This is all a bit of a perfect storm under this new mechanism for prices, if the Pound had slipped to say £1:€1.10 (The low point so far this year in April 2010) wheat prices would be higher and so would beet. Of course after the last few years, this new system was meant to add a bit of stability to beet pricing, it's therefore slightly ironic the pricing ended up being just about as volitile as under the last system.