You will now have received from British Sugar notification of your updated contracted tonnage for 2015. We would encourage you to think carefully when planning any changes to your beet area for next year.
The signals from the market, and therefore from British Sugar, our customer, could not be clearer. There are large stocks overhanging the market, and the current quota regime means that there are severe limitations on where they can be sold. The result of this is that there is no demand at all for sugar over and above our contracted amounts next year. This is why British Sugar have already announced that the price for surplus beet in 2015 will be very low.
We understand why growers have traditionally felt that it was prudent to plan cautiously when deciding what area of beet to sow, since the risks associated with falling short, and possibly putting future contracts at risk, seemed great. We have worked hard with British Sugar to adapt the rules for next year, in order to allow growers to feel more confident about planning for good yields. In particular, the changes announced to performance rules, meaning that growers only need to deliver an average of 90% of their contracted tonnage over the two years 2014 and 2015, should combine with what is expected to be a good crop this year to allow a good safety margin next year.
We would therefore urge growers to plan your area very carefully, as delivering any beet beyond your contract will attract a very low price, and may prove to be an unnecessary insurance policy. It is not too late to change your seed order, or indeed to make arrangements with other growers to transfer contracted tonnage between farms, via a one-year lease, if this helps to manage this difficult situation.
Please feel free to ask the NFU, or your British Sugar Area Manager, for further advice about any of these issues.
We understand the frustration and practical difficulties this is causing. However, we remain convinced that these measures are an appropriate response to the circumstances, and that they are necessary if we are to be ready to face the moment in 2017 when quotas finally end. We firmly believe that the UK sugar beet sector has a sound future, but we cannot plan with confidence while this level of stocks overhangs the industry.
Yours sincerely
The NFU Sugar Board