Sugar price offer leaves sour taste
SUGAR beet growers are threatening to grow other crops next year in a row over prices.More than 100 growers are expected to attend a meeting on Friday organised by Cambridgeshire farmer Oliver Walston to protest at British Sugar's offer of £24 a tonne for the 2009 harvest.
SUGAR beet growers are threatening to grow other crops next year in a row over prices.
More than 100 growers are expected to attend a meeting on Friday organised by Cambridgeshire farmer Oliver Walston to protest at British Sugar's offer of £24 a tonne for the 2009 harvest. The National Farmers' Union (NFU) has given its support to the gathering.
“If the price remains the same, we'll just grow oilseed rape or beans or peas,” said Mr Walston, who will be hosting the meeting at his farm at Whittlesey
Rocketing fuel prices and other increasing costs meant the price being offered was unviable, he said.
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“You lose money if you grow at those prices. The sad thing is it used to be most profitable crop in East Anglia. Now it's the least profitable,” he said.
But British Sugar, which has a plant in Bury St Edmunds as well as other parts of East Anglia, said that with the euro strong against the pound, prices at the moment were looking more towards £26 a tonne than £24 a tonne, which was the “back-stop” price.
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Robin Limb, agricultural development manager at British Sugar, argued that British Sugar, like farmers was finding its margins squeezed, not least by low retail prices.
“The retail price of sugar actually bombed in Europe last year,” he said. “The market is now coming back into some sort of balance.”
British Sugar was urging growers to increase their efficiencies and yields, he said.
“We know for a fact that many growers, certainly those in the average to above average category, will be making a good margin at the prices we are quoting,” he said.
“This is not by any means a final position, but at the end of the day, there's a limit we can afford to pay for the beet before the whole industry becomes unviable.”
NFU regional spokesman Brian Finnerty said the NFU had given its support to the gathering of beet growers.
“The meeting, being organised by Oliver Walston, wants sugar growers to meet this month to make a 'take it or leave it price offer' to British Sugar for 2009. The move follows a deal struck by the NFU to secure a minimum beet price of £24 a tonne in 2009,” he said.
“This agreement will address uncertainty linked to currency fluctuation and puts a floor in the price.
“Over the past few weeks, however, the price debate has been further fuelled as growers revisit their costs against the spiralling costs of inputs. Many growers see the current offer as unrealistic and the approaching contract deadline of August 15 appears to be bringing things to a head.”
William Martin, chairman of NFU Sugar, said: “We have been telling British Sugar for months now that the beet price isn't good enough.
“The latest move by growers intent on sticking together and making themselves heard by the processor can only complement what we are doing centrally and strengthens the NFU's negotiating position in the interests of all beet growers.”
Independent agricultural consultant David Bolton of David Bolton Partners said materials and transport had rocketed in price “beyond reasonable expectation” in the last seven months.
“Transport costs versus transport allowance slips out of line as oil flirts with $150 per barrel, and UK taxes now make it a £120 job just to fill a Discovery tank,” he said.
“The closer to the factory you grow, the better your opportunity at any particular beet price. To compete from further away, you do need to be a better grower for the same return.
Mr Walston said numbers attending the meeting would depend on whether the harvest had started, but well over 100 people had applied to attend, and he was expecting around 200 growers to turn up.