British Sugar says it expects some 105,000ha of sugar beet to be drilled this spring – enough to meet production targets following protracted price talks with growers.
Longer-than-expected price negotiations over the value of sugar beet – and the additional risk of growing it following the ban on neonicotinoid seed treatments – had prompted speculation that some farmers would walk away from the crop.
After months of price talks last year, British Sugar and NFU Sugar finally agreed a choice of one-year and three-year deals last autumn – with an increased bonus giving growers a 15-25% bonus if the European white sugar price rises above an agreed value.
For the one-year contract, if the reference price reaches €375/t, growers will receive a 15% share of the price above that point.
For the three-year contract, if the price reaches €400/t, growers will receive a 25% share of the price above that point.
Low prices hamper bonus chances
But with the European sugar price currently languishing at around €330/t, there is some way to go before the bonus is triggered.
Asked whether he felt it would pay out, British Sugar managing director Paul Kenward said he hoped it would.
“It hasn’t paid out yet, which is genuinely to my regret. The world sugar price and the European sugar price have been quite low.
“We fully expect they will come back – it’s a cyclical market and we have put the contracts together so we share the benefits of high prices when they come.”
Least worst option
Growers may not be so upbeat, Michael Sly Chairman NFU Sugar said, and for many growers sugar beet is no longer the crop of choice, but the least worst option currently.
He said: “After dreadful harvesting conditions this year, coupled with an increasing risk of virus yellows infection, growers’ confidence in the crop has again been knocked.
“This is compounded by low contract prices, the bonus not paying out and ever higher production costs”.
Mr Sly said that growers need to be rewarded for the increased risks they are taking in growing the crop and that NFU Sugar would continue to engage with British Sugar on this point.
High yields despite lifting challenges
Sugar beet is yielding above the five-year average – despite one of the most challenging campaigns in living memory.
The final average yield is still unknown but, according to British Sugar managing director Paul Kenward, it is expected to exceed the 75t/ha adjusted five-year average.
The Bury St Edmunds beet factory closed for deliveries on Wednesday (19 February), with the Cantley factory due to follow on 7 March.
“It has been really difficult this season,” said Mr Kenward. “The amount of rain we’ve had has been genuinely unprecedented. I know farmers have had a lot of problems getting beet lifted and I am really grateful for the work they have put in to do that.”
With many growers battling sodden fields, NFU Sugar had expressed concerns that some farmers would not be able to lift all beet in time – particularly given the factory closure dates and weather-related delays in harvesting.
In response, Mr Kenward said British Sugar had agreed to reduce the slice rate at its Wissington factory – extending the campaign by one week to give growers every opportunity to lift beet.
Wissington is now expected to close for deliveries on 19 March
This would enable beet lifted by Cantley and Bury growers after their factories closed to be sent into Wissington while minimising additional transport costs.
The Newark factory is due to close later still – on 4 April.