Final figures for our beet
FINAL payment for the 1997/98 sugar beet campaign arrived recently. The price for A and B beet has increased by a little over 2% to reach £32.695 per adjusted tonne and the C beet price finalised at £9.276 per adjusted tonne. That has lifted our output by just under £360 compared with our forecast earlier in the year.
Late delivery bonuses of £1621.31 helped to swell the overall output to £38,925.24.
But due to the massive over-production of C beet last year, that represents only £21.63 for an adjusted tonne before transport allowances.
Working on five-year yield data, our target is to produce 15% more than our contract tonnage as recommended by British Sugar. Last year we harvested 104% compared with 1995 when we finished 11% under quota on a similar area.
No mystery there. It is simply the effect of rainfall on limestone soils influencing yields of clean roots and sugar percentages.
Over the next five years we shall try to drill 20ha (50 acres) of beet. Referring to the British Sugar example of dividing your average five-year clean yield into 115% of the contract tonnage, that should work out at 21.3ha (53 acres) for Easton Lodge. Since our five-year average sugar percentage is 17.06, I feel justified in trimming it slightly.
No one can plan for the extreme years of 1997 and 1995. But neither can our business afford to grow too much C beet at or about £10/t.
The other factor to be taken into account concerning over production is the haulage cost. British Sugars transport rate is reducing and haulage costs are increasing. Last year the difference between our allowance and the actual cost amounted to £720; for a similar tonnage on this years figures this gap would widen to £1390.
I have worked out the cost of committing too much area to produce quota tonnage based on last years figures and the results are shown in the table.
Our drilled area of 24.82ha (61 acres) produced a gross margin of £1077.82/ha (£436/acre) shown in the table. If we had committed 20ha (50 acres), as proposed, we would still have produced 570t of C beet. However, the dilution effect of the price would have been less and the gross margin increased to £1262.88/ha (£511/acre). Nonetheless, the total gross margin is reduced by £1493.70 but released 4.82ha (12 acres) to earn an alternative gross margin.
Had the area been sown with peas or oilseed rape for harvest last year, the farm would have made a gross margin of £850/ha (£345/acre) or £4097 and been better off to the tune of £2600. That certainly is food for thought.
The down side to growing beet can sometimes be the performance of the following crop. We have traditionally sown milling wheat after sugar beet with variable degrees of success and since it represents 20% of our total wheat area, the impact on profit in a bad year can be significant.
Last harvest it made no difference with wheat drilled after sugar beet in November, December and January, yielding just as well as those sown in September and October.
Not so in 1997 when yields following sugar beet were reduced by 1t/ha compared with the rest of the drilled area. That reduced overall farm output by £1931 and if levied against the sugar beet crop would have reduced its gross margin by £80/ha (£32/acre).
In 1995, when all yields were down, the differential between conventional sowings and late sowings after sugar beet was 1.7t/ha (0.7t/acre). That reduced farm output by £5206.
If this had been debited against the beet crop the gross margin for beet the previous year should have carried a burden of £197/ha (£80/acre).
It is important to know the facts before pencilling in the rotation for the next five years. We are still planning to include sugar beet in those forecasts, but only after careful analysis of the strengths and weaknesses.
We shall continue to grow first wheats on half the farm rotating with oilseed rape, peas and sugar beet. Herbage seed production remains but only on 7% of the cultivated area with spring barley sown as a nurse crop every other year. Winter barley, on a malting contract, still looks relatively attractive on a 7% basis given that the straw is excellent for the pig unit and the earliness of harvest aids oilseed rape establishment.
All may change of course as the EUs Agenda 2000 CAP reform plans becomes clearer.
Last years sugar beet harvest produced a total output of nearly £39,000. But massive over-production of C beet brought the price down to only £21.63/adjusted tonne before transport allowance.
Tonnes Rate (£/t) Value (£) £/ha
Actual area 24.82ha
A+B beet 880 32.695 2,8771.60
C beet 919.8611 9.276 8,532.33
L D bonus 1,621.31
Transport allowance 8,239.76
Less NFU & R&E Levies 372.57
Total income 46,792.43 1885.27
Less variable costs 20040.90 807.45
Gross margin 26,751.53 1,077.82
Figures calculated on proposed area of 20ha
A+B beet 880 32.695 28,771.60
C beet 570.3313 9.276 5,290.39
L D bonus 1005.24
Transport allowance 6,639.62
Less NFU & R&E levies 300.22
Total income 41,406.63 2,070.33
Less variable costs 1,6149.00 807.45
Gross margin 25,257.63 1,262.88