Following the recent agreement reached between the NFU’s Sugar Beet Committee and British Sugar, Strutt & Parker’s farming consultant Richard Means urges growers that they must carefully evaluate the position of sugar beet within their rotations.

“Following the announcement that the price of A & B quota will be a maximum of £21 per tonne including bonuses for the 2007/08 campaign, collaboration between growers must be considered in order to ensure that the crop can continue to be grown on a profitable basis. At £21/t gross margins will still be in the region of £450 - £850 per hectare (including harvesting and haulage) depending on the yield but this can still be improved by 10 – 15% through collaboration”.

He continues “we are involved with a number of farming collaborations and are looking to put together grower groups for the next sugar beet campaign”.

“Sugar beet should be considered a specialist crop and a combination of maximising yields and making the most of economies of scale will be the best way of deriving a profit from the crop. Co-ordinated growing will reduce costs of harvesting and haulage, improve efficiencies and concentrate management expertise”.

British Sugar have also expressed they would be keen to see and back any proposal of a grower group. It is now clear that growers who have previously delivered beet into Allscott and York and are further than 50 miles from Newark will be offered a compensation payment of £8 per tonne if they want to relinquish their contract tonnage. A second option where growers can continue for one final year can take an initial compensation payment of £4 a tonne and a second tranche of £2 a tonne when their quota is relinquished.

Means continues “with an estimated 1.3 million tonnes of quota being made available through the restructuring and British Sugar’s commitment to purchase a further 500,000 tonnes from the EU, there is the potential for growers and grower groups to expand their quota. Improvements in varieties and agronomic techniques over recent years have seen higher yields and in combination with the recent quota cuts, this has reduced the area of land committed to beet. UK growers will have the opportunity to take on quota in order to maximise their farm gross margins.

“The question remains “what will be the value of this quota? The availability of such a large tonnage and the economics of supply and demand would logically predict the value to be very low. If British Sugar wishes to maintain the current UK output, perhaps they should consider providing quota free of charge?”