NFU Sugar’s Commercial Analyst Arthur Marshall answers YOUR questions on the 2019 contract agreement
The 2019 one year contract price is £19.07/t with no crown tare deduction. Crown tare meant only 93.39% of the beet you deliver is paid for, while removing it means you contract at a transparent price for every tonne of beet you deliver.
Existing multiyear prices, and prices in previous years, have been contracted with the crown tare deduction, but the equivalent prices on a zero crown tare basis are shown in the table below. Prices in either column are comparable – in recent years, the contracted price would have been up to £2/t above the equivalent transparent price without crown tare.
Contract (crop year)
Equivalent price (per adjusted tonne)
at zero crown tare
at 6.61% crown tare
£28.01 – as contracted
£31.67 – as contracted
£24 – as contracted
£21.62 – as contracted
2017-2019 3 year deal
£22 – as contracted
2018-2020 3 year deal
£22.50 – as contracted
2019 1 year deal
£19.07 – as contracted
Contractually, you are of course still receiving £22/t and £22.50/t for existing multi-year contracts with crown tare deducted. As British Sugar’s systems cannot cope with paying two rates of crown tare, you’ll be paid the equivalent price to £19.07/t under the terms and conditions of previous contracts – this is the £20.42/t invoiced price that has been referred to.
The new mileage calculation will still result in a single mileage per contract. The distance from each individual field, as declared in your crop declaration, will be taken into account in your overall contract distance, which will be the average distance weighted according to the size of each field.
Finally, with the new performance rule criteria being introduced, many of you are thinking about the possible implications of lower yields in a year like 2018, or of reducing plantings in a year where prices are low and where increased disease risks are faced without the availability of neonics.
Performance rule changes mean only one of two criteria needs to be met to retain CTE. Your CTE will not be at risk of a cut for a given year if you either deliver 95% of CTE over a two year average, as per existing rules, or fulfil the new rule introduced which requires you to have planted a sufficient area in the previous contract year. Only one of the two criteria need be fulfilled, otherwise British Sugar may decide to reduce your CTE.