Outlook 2026: Sugar beet faces lower prices, increased costs
© GNP It was written last year that despite the 17.5% price reduction to a headline £33/t, the 2025-26 sugar beet campaign would produce returns for growers that compared favourably to alternative break crops.
With the continued decline of grain commodity markets, the gap has widened, reports Andersons director Jamie Mayhew.
Early reports showed surprisingly positive results despite the lack of rainfall during the spring and summer months, with good root yield and high sugar content, albeit mostly on heavier soils.
See also: Outlook 2025: Sugar beet prices depressed but break even
It is now shaping up to be a tale of two halves, with heavier land growers seeing positive results and lighter land growers suffering from the lack of rainfall.
In summary
- Lower sugar beet contract prices and increased costs mean a challenging season ahead
- Many growers could face losses, making alternative crops more attractive to grow
- Strong uptake for the one-year contract holiday – 750,000t CTE allowance fully subscribed
Given the continued decline in the value of other crops and low prices in world sugar markets, it was unsurprising to see a further drop in the sugar beet price for the coming season.
The headline for 2026-27 is a fixed-price contract of £30/t for up to 65% of the contract.
A contract with a guaranteed base price of £25/t is also offered, plus a market-linked bonus for up to 100% of the contract.
In addition, growers can choose an index-linked contract (previously known as futures-linked) for up to 50% of the contract.
For those opting to mitigate risk by fixing most of their contract at £30/t and filling the balance with the market-linked option, the base price will be £28.25/t. That is a 30% drop in price in just two seasons.
To compound the issue, the cost of production has risen by more than 35% since the 2021-22 campaign.
At a net margin level, growers could generate losses on par with that season when the headline price was £21/t.
Increased risk
The increased risk of soil and infrastructure damage and following crop yield depletion when growing sugar beet – compared with alternatives such as beans, peas or even oilseed rape – has regularly been outweighed by the beet price.
For some, there may no longer be a sufficient return. There has been a strong uptake for the one-year contract holiday, with the 750,000t contract tonnage entitlement (CTE) allowance fully subscribed.
That figure amounts to about 10% of the total tonnage grown, so there may be many growers left growing sugar beet who wish to stop.