Growers and processors have agreed contract terms for the 2019-20 sugar beet campaign.
The agreement, announced by British Sugar and NFU Sugar on Thursday (13 September), will see beet growers receive a minimum price of £19.07/t.
The joint announcement represents a £3.43/t reduction on the 2018 minimum price of £22.50.
However, the contract price comes with a commitment from British Sugar that the crown tare deduction – the top part of the beet considered less suitable for processing – will be removed permanently for all new contracts agreed from the 2019 crop onwards.
This is equivalent to £20.42/t under the terms and conditions of previous contracts.
For the 2019 one-year contract, there will be a 15% revenue share (increasing from 10% in 2018) for growers above an EU average white sugar price of €375/t (down from €475/t in 2018).
There will be no new three-year contract deal on offer in 2019.
NFU Sugar board chairman Michael Sly said: “After a protracted negotiation in the face of difficult market conditions, NFU Sugar has reached agreement with British Sugar on improving the simplicity and transparency of contracting, which we believe will put the sugar-growing industry on a firm footing for the future.”
Colm McKay, British Sugar’s agriculture director, said: “We’re pleased to have reached this agreement with NFU Sugar and believe it will stand us in good stead for the future.
“Our industry is one of the most efficient in the world and we look forward to continuing to work with over 3,000 growers to produce a quality product.”
No neonics conundrum
Reacting to the price announcement, Hertfordshire grower and Farmer Weekly Arable Farmer Focus writer Robert Law reflected on lower world market sugar price amid a surplus of supply, both in the EU and across the world.
Mr Law added: “When you add the crown tare deduction back on at 6%, the price comes back to £20.42, which is similar to last year. I would say £20/t is the tipping point. We all realise the world sugar situation and that the world sugar price was going to drop.
“The difficulty for sugar beet growers next year is that there won’t be any access to neonicotinoids. People have just got used to sowing beet with neonics, but tackling beet yellows virus without it is going to be difficult.”
British Sugar and NFU Sugar have also agreed to work together to develop a greater risk/reward contract model with the intention of a one-year pilot in 2020-21. Both say this is an important step forward in growers having the option to share more of the reward and risk that exists in the sugar market today.
Growers can expect to receive their contract offers online or in the post in the week beginning 24 September.