Sugar beet days sadly numbered

Growing sugar beet has been one of the most dependable activities at Ballindeasig, bringing in a consistent profit and providing the best entry for first wheats.

But now its days seem numbered.

“Irish Sugar has yet to reveal what its strategy will be following the recent reform,” says owner/manager Ed Jagoe.

“But the expectation is that it will take part in the restructuring scheme and close its factory at Mallow.”

The outstanding question facing Ireland’s 3700 growers is when.

“There was a big demonstration last week in Cahir, Co Tipperary, and opinion among farmers was split,” says Mr Jagoe.

“Those who previously supplied the Carlow factory, which closed earlier this year, thought it best that Mallow goes at the end of this season.

But those closer to Mallow wanted to see it continue at least for another year.”

Mr Jagoe falls into the latter category, believing he can show a profit, even after next year’s 25% cut in the beet price.

The calculation is that, on top of next year’s EU minimum of 32.9/t (22.4/t), beet growers will also be getting a 3.99/t (2.70/t) top-up, already agreed between the Irish Farmers’ Association and Irish Sugar.

Then there is the 64% compensation from Brussels, which next year will pay beet growers 7.35/t (5/t), plus another 1.14/t (78p) regional premium – offered to those countries that are net importers of sugar.

This compensation is, of course, decoupled from production and will be added to the single farm payment.

But even putting it to one side, growing sugar beet next season should bring in around 37/t (25/t), clearing the break-even price of 28/t (19/t) quite easily.

But looking further ahead, by 2007 the beet price will be down below 30/t (20/t), and in 2008 less than 27/t (18/t).

“At these levels it certainly won’t be worth growing the crop.”

Despite the fact that the economics of beet production should still stack up for 2006, Mr Jagoe is far from convinced that the Mallow factory will still be operating.

“With 145m (99m) available in the restructuring fund, Irish Sugar’s parent Greencore may decide it wants the money sooner rather than later,” he predicts.
Under the agreement reached in Brussels last month, at least 10% of the restructuring fund – equivalent to 73/t (50/t) – has to be paid out to growers and machinery contractors, should the factory close.

But Mr Jagoe believes that the actual share-out should be much more equitable than this.

“Of course, as farmers, we want more than the 10% to compensate us for our loss of our earnings.

But many other businesses will be affected by the closure, too.

“I worry for our contractor, who has done a fantastic job over the years lifting beet.

Beet haulage businesses will also lose out.

All these people need a share of the restructuring fund – not just Greencore.”

But Mr Jagoe is also keen that Irish Sugar should look closely at the possibility of converting the Mallow factory into a biofuel plant.

Under the sugar reform, factories doing this would qualify for 75% of the restructuring payments, worth around 550/t (375/t).

The emphasis in Ireland has been on oilseed rape, with pilot projects under way in Wexford and Donegal, backed by exemptions from excise duty on rape fuel.

“It’s good that the government is doing something, but sugar beet is a much safer crop for us to grow than oilseed rape, especially when it comes to harvest time,” observes Mr Jagoe.

About two-thirds of the beet crop at Ballindeasig has now been lifted, with another 100t taken to Mallow earlier this week.

Results were not available as Farmers Weekly went to press (7 December), though previous consignments had produced an average 16.6% sugar content, with 12.5% tare.

Yield has so far come to a very satisfactory 57t/ha (23t/acre).

Meanwhile, Mr Jagoe has been celebrating the arrival of his first single farm payment, which was deposited in his bank account last Friday (2 December), net of deductions for force majeure (1.18%), national reserve (1.82%) and modulation (3%).

“My aim will be to keep as much of it as possible separate from the farming account, though I know that won’t be easy.

Many people round here have had to dip into their cheques already to subsidise their farming.”

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