UK: British Sugar and NFU announce 2013/14 sugar beet contract price

Today, at the Cereals event, British Sugar and the National Farmers’ Union (NFU) announced details of the 2013/14 sugar beet contract offer and the conclusions of the mid-term review of the Inter-Professional Agreement (IPA).

The contracting pack will be sent to growers during the week of June 18.

The 2013/14 Contract Tonnage (CTE) beet price for 2013/14 has been fixed using the beet pricing mechanism at �26.51 per tonne

This price reflects increased growing cost, the forward cereals prices for 2013 and the weaker �/€ exchange rate.

Regarding the 2013/14 Industrial Tonnage (‘ICE’), the Industrial Contract Entitlement is available in 2013/14 at a fixed �25.51 per tonne.

ICE is for out-of-quota uses such as bio-fuel. Growers who offered to grow this contract for 2012/13 are entitled to renew it on an annual basis until 2014/15. A limited amount of additional ICE tonnage will be available on application for 2013/14.

The price for surplus beet in 2013/14 will not be less than �20 per tonne of adjusted beet.

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British Sugar and the NFU have agreed to the introduction of new “formula-based” enhanced Late Delivery Allowance (LDA) payments for the 2013/14 crop onwards. This will pay 50% more than historic yield losses caused by storage between January 8 to February 28, and in a ground-breaking agreement, 100% more from March 1 onwards.

Future payments will be based on new research trials to be conducted by the British Beet Research Organisation (BBRO) to measure sugar losses during beet storage. (Historically these are 0.13% yield per day stored).

All LDA payments will be based on the UK beet price rather than the EU’s minimum beet price. At current prices this is an extra payment of around 30%.

The NFU has been exploring a frost insurance scheme for UK sugar beet growers with the aim of providing protection for growers against the loss of a proportion of their crop in situations of severe frost as experienced in the 2010/11 campaign.

It aims to introduce frost insurance for the 2012/13 campaign to provide a safety net to ensure growers do not have to bear the total cost arising from failing to deliver their CTE or ICE tonnage in the case of extreme early frost, and says it will issue full details of the frost insurance scheme in due course.

For this campaign, growers will be invoiced the insurance charge. In future years, British Sugar and the NFU will incorporate the cost of the insurance within the beet pricing mechanism, and the 2013/14 beet price reflects this.

British Sugar’s agriculture director Colm McKay said: “It is good to see that this mid-term review has concluded that the beet pricing mechanism is working well and reacting to market conditions. As part of the review we have addressed grower concerns over the length of campaigns via our enhanced LDA payments, which will more than cover the losses experienced in a well-managed clamp.”

NFU Sugar Vice-Chairman Robert Law said: “NFU Sugar has worked hard on behalf of our members to put in place a frost insurance package. We are confident that the introduction of this insurance package and enhanced LDA payments demonstrate we have listened to our members and worked with British Sugar to address growers concerns with regard to longer campaigns”.