Key elements of the 2015 crop agreement:
2015/16 contract beet price (CTE) - The CTE beet price for 2015/16 has been fixed at £24 per tonne. This price should provide a good gross margin for those achieving an average yield, in comparison with alternative crops at current prices.
2015/16 industrial beet price - The ICE beet price for 2015/16 has been fixed at £24 per tonne. Growers who hold an existing ICE contract will have that entitlement rolled over for 2015. The ICE price will continue to be set annually at the same time as CTE.
2015/16 surplus beet price - The price for surplus beet will not be announced until nearer to sowing however, to enable growers to plan their contract area appropriately we would like to highlight that it is expected, due to the current levels of excess stock, the surplus beet price will be significantly below the price levels experienced in recent seasons.
Enhanced Transport Allowance
The transport allowance has been reviewed following the end of the 2011 IPA agreement. In recognition of the changes to the regime, the previous Euro linked allowance has been scrapped and an increased allowance linked to the costs of the Industry Haulage Scheme will be paid.
This will include an additional fixed amount for both cleaning and loading. As a result of these changes it is estimated the transport allowance for 2015 will be approximately £1.50/tonne higher than the allowance in 2014.
Industry Haulage Scheme Incentive payment - The NFU and British Sugar are committed to continuing to promote the gains in efficiency that have been achieved by the current Industry Transport Scheme. To that end, growers that have their beet delivered using the Industry Scheme in 2015 will receive an additional payment at the end of the campaign of £1/tonne of adjusted beet.
Contracted Tonnage / Area
Due to the high levels of sugar stock referenced earlier, it will not be possible to continue to contract for the same area of crop in 2015. In order to facilitate a reduction in planned area, four measures have been agreed:
1. Performance rules - to help growers minimise producing excess surplus beet, there will be a relaxation in the contract performance rules so that for 2015/16, growers will only need to deliver a 2 year average of 90% of their contract tonnage over the 2014 and 2015 crops (rather than 95%) to retain their full entitlement for 2016.
2. Contract Holiday – it is recognised that some growers may not wish to grow their full entitlement. For those that wish not to grow either part or all of their entitlement in 2015, but still retain their entitlement for 2016, a one-off ‘contract holiday’ is being made available. This will only be available for a limited tonnage of up to 20% of the national crop and the offer will be closed by 26th August.
3. Possible temporary contract cut – if following the return of contracts, the area is still over-subscribed, it may be necessary to implement a one-off across the board temporary cut in contract for 2015. Any required contract cuts will be applied to CTE and ICE in equal proportions. Growers will be notified of any requirement for an across the board contract cut for 2015 by mid-September 2014.
4. British Sugar’s own beet growing. In the light of the reduced demand for sugar, British Sugar has agreed to reduce the area of beet it grows by 50% in 2015. If there is a contract cut across the board, the British Sugar tonnage will be further reduced in the same proportion.