NFU Sugar answers the questions you've been asking about the 2019 contract agreement

NFU Sugar’s Commercial Analyst Arthur Marshall answers YOUR questions on the 2019 contract agreement

Watch the video or read on to find out:

  • how you can compare the 2019 one-year contract price with no crown tare to previous deals.

  • how the changes to the mileage calculation account for the full distance from field to factory weighbridge, and still result in a single mileage per contract.

  • what the performance rule changes mean for the decisions you are making.

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)

Difference

at zero crown tare

at 6.61% crown tare

2013

£26.16

£28.01 – as contracted

£1.85

2014

£29.58

£31.67 – as contracted

£2.09

2015

£22.41

£24 – as contracted

£1.59

2016

£20.19

£21.62 – as contracted

£1.43

2017-2019 3 year  deal

£20.55

£22 – as contracted

£1.45

2018-2020 3 year  deal

£21.01

£22.50 – as contracted

£1.49

2019 1 year deal

£19.07 – as contracted

£20.42

£1.35

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.

If you have any other questions about the contract or any other issue relating to sugar beet, please call our helpline on 0370 066 1974 or send an email to [email protected].

We are here to represent you and are always happy to help.


Last edited on: 15:11:2018

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