Sugar beet growers look set to step up their cereal acreage and cut their beet acreage, unless they get a substantial price increase from British Sugar.
“When we agreed the IPA last year, the beet price looked respectable against feed wheat at £70/t,” said NFU sugar board chairman John Hoyles. “But £19.50/t for beet in the current market is a different prospect for growers.”
Since the last contract agreement, the price of grain has more than doubled – to over £160/t – and many growers are now considering abandoning beet, if not for 2008, then certainly for 2009.
Against this reality, the NFU has told British Sugar that it wants to renegotiate the price. “Growers will turn to alternatives crops and beet supply will be seriously put under threat if the processor doesn’t take pre-emptive action,” said Mr Hoyles.
NFU chief sugar adviser Helen Kirkman said she had not met any grower in recent months who was planning to grow beet unless there is a substantial price increase.
Despite this, the NFU is advising members to return their 2008/09 contracts to British Sugar – the final deadline for doing so is 24 September, after which contract tonnage entitlement will be terminated.
Failure to return the contract could exclude growers from any compensation for a 13.5% permanent cut in quota, expected to be approved by EU farm ministers at the end of this month as part of an overall package of restructuring changes.
On the subject of EU quota cuts, the NFU insists that all growers should be treated fairly, with any cuts apportioned equally. “There should be no cherry-picking by processors,” said NFU sugar board vice-chairman William Martin.
But British Sugar agriculture manager Robin Limb said British Sugar had no intention of cherry-picking. Although the details of the quota cut remained to be seen, he expected that any compensation would be spread evenly and fairly among growers according to the size of their contracts.
Mr Limb had little comment on the level of beet prices, though he acknowledged that there was scope for an increase depending on the outcome of negotiations with the NFU.
Without a price hike from British Sugar, growers are likely to turn to cereals.