‘No’ to low-cost beet production

Sugar beet growers must speak out against British Sugar’s refusal to increase minimum prices for next season’s crop, the NFU told farmers at Cereals 2006.

Sugar board chairman John Hoyles called on growers to send a clear message to British Sugar that they would not produce the crop at a loss.

“Don’t let anyone pull the wool over your eyes.

The only way to make this crop profitable is to let British Sugar know you are not happy with the minimum beet price and they need to add to it,” he said.

NFU negotiations over the 2007-2008 contract ended in stalemate last week with the union warning farmers would abandon the crop.

Many growers said they would cease production if prices fell below £20/t, said Mr Hoyles.

The NFU has calculated that, by 2009, and at current exchange rates, the EU minimum beet price would be just £17.50/t.

British Sugar had gravely underestimated farmers’ costs, rents and borrowings, Mr Hoyles added.

But the company remains adamant that it will secure enough beet to meet quota.

Colm McKay, head of agriculture at British Sugar, said:

“If you take the minimum beet price for the 2007-2008 crop at the prevailing exchange rate of 1=69p, it’s about £20/t.

We believe growers will be interested in growing the crop at that price.”

He admitted some growers would choose to leave beet production.

“We have talked with the NFU about how we can form an outgoers’ scheme.

But we believe there will still be sufficient growers out there who will want to take on the extra tonnage that’s released.”

He denied British Sugar expected farmers to use sugar compensation or their single farm payment cheques to prop up beet production.

Lower prices would be partly offset by rapid improvements in yield, said Mr McKay.

“The potential is still very positive and that’s what our 70t/ha yield challenge is all about.”

But Mr Hoyles and other growers were unconvinced.

“Prices are dropping far more quickly than yields are increasing.

And I can’t see that 70t/ha is achievable on many farms, particularly on sandy land – water is a precious commodity and the costs of irrigating are not justified at £17.50/t,” Mr Hoyles said.

Producer David Eyles, Wissington, Norfolk, said sugar beet had been his bread and butter.

“Any decisions will have to be based on gross margins – if we can grow something else more profitably then we will.”

Robert Pickard, Lavenham Fen Farms, Cambridgeshire said:

“It’s not that we don’t want to grow sugar beet at these prices.

We simply can’t afford to.

And we certainly can’t reinvest.”

Independent consultant Jamie Gwatkin added:

“This is a critical issue.

Not all growers can produce 70t/ha and a lot will depend how far you are from a factory.

Most growers will struggle at £17.50/t.”


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