The future of the 2009 sugar beet crop hangs in the balance, despite British Sugar agreeing last Wednesday (25 June) to extend the offer deadline for 2009 grower contracts to 15 August.
NFU sugar adviser Lee Abbey said many of its 4500 grower members were undecided whether to sign up to either contract option (Business, 30 May) and were likely to leave the decision until the last minute.
“Having an underwritten price is an advantage, but I suspect £24/t may not be enough. There will be no further formal negotiations on beet price, so it will be down to growers to make their feelings clear, by signing or not signing contracts.
“Either way you’ve got to make sure you know your costs.”
Some growers could turn their back on sugar beet this year, while others will stick with it for now
Charles Whittaker of Brown & Co also thought some farmers would give up growing some or all of their beet. He estimated that half of his beet-growing customers would only grow 70-80% of their quota next year, with those on marginal land most likely to question the value of the crop.
“I think the cost of production in most situations is at least £27/t when you include the cost of haulage and a figure for land and finance. Why on earth are we still talking about £24 or £25 it just isn’t enough.
“We don’t want to see sugar beet disappear, but British Sugar is trying to get away with offering people the bare minimum.”
Dramatic increases in fuel and fertiliser, plus stronger prices for cereals and oilseeds meant typical net margins for sugar beet at the latest offer prices were still about £100/acre less than other crops, he said. Malting barley in particular would be attractive for those on light land, he noted.
But British Sugar’s Robin Limb believed the contract price on offer was “fair” and the price of sugar on world markets, plus higher costs for sugar processors, meant there was no scope for further price negotiation. He said there had been a steady return of contracts and significant demand for extra tonnage, but would not say how many growers had signed up so far.
“I’m confident we will get enough contract tonnage. I think 90% of growers will go for option one, which is a base price of £24/t, plus an escalator depending on the exchange rate. If the euro stays where it is, we could see this price reach £26/t.”