After negotiations with NFU Sugar, British Sugar has announced a new one-year beet contract from 2022, as well as opportunities for growers on multi-year contracts to stabilise their prices, in a bid to keep British sugar being grown by British farmers.

“2020 was a year of challenge,” explains Harry Mitchell, strategic engagement manager at British Sugar. “We had issues with virus yellows and cercospora but now in 2021 we’re in better territory.

“We have a healthier crop, we’ve been able to grow without neonicotinoids because we had such a cold winter, the crop has little virus in it, late summer sunshine is assisting with sugars – it’s a very different picture this year.”

Looking forward, British Sugar has unveiled a one-year contract for 2022 which will pay a fixed price of £27/tonne. “This is a 33% increase on the previous year’s price and it’s a fixed price,” says Harry. “Where previous contracts have had a market linked bonus built in, this removes variability and risk for growers, who can budget with certainty.”

For 2022, no new multi-year contracts are going to be issued, however, current multi-year contracted growers will have the option to upgrade to a fixed £25/t agreement by contracting for an additional year, he adds. This will allow growers with existing contracts to move from the £21.18/t price to £25/t for the rest of their term – while committing to an extra year.

“We also acknowledge that growers are dealing with inflation across production, and we want to align our prices with that.

“What’s more, we’re seeing more confidence in sugar sales, so want to be able to share that upside with growers.”

He points out that these prices are on a zero-crown tare basis meaning that growers are paid for the entire roots of beet they deliver. The £27/t (zero crown) is the equivalent of £27.92 on a crowned basis, which growers are more familiar with from previous years. Similarly, £25/t (zero crown) is the equivalent of £25.85/t on a crowned basis.

In addition, a continuation of the Futures-linked variable priced contract has also been agreed. “This gives growers the ability to make their own pricing decisions for a proportion of their contract,” notes Harry.

This will now be open to all growers who will have the option to allocate up to 10% of their tonnage. Futures-linked contracts will be available for a maximum of 30 days from the contract window opening.

For local growers, a new local premium will also help boost prices, adds Harry. “The local premium is available for growers up to 28 miles (contract distance) from their nearest factory.”

Premiums start at £2/t for growers up to nine miles and will reduce on a linear scale down to 10p/mile up to 28 miles. “This effectively means a grower nine miles from a factory would see their price increase from £27/t to £29/t, and on average receive £0.65/t Late Delivery Allowance in addition, making £29.65/t.

The £12M Virus Yellows Assurance Scheme will remain in place next year and will continue to compensate growers for a proportion of losses if the virus is present in their crop.

As well as new contractual opportunities, British Sugar – together with NFU Sugar – continues to champion the corner for growers and has applied for an emergency authorisation for neonicotinoid treated seed in 2022, should it be required if the Rothamsted virus yellows forecast be high, points out Harry. “Once we know the outcome of the emergency authorisation and any associate terms, the seed order process will be confirmed.

“We’re also continuing to invest in the future of the sugar industry, through science-led advice and guidance from the BBRO, innovation in seed technology, and industry-wide advocacy for plant protection products and future breeding techniques,” he concludes.

Contracting will be open by mid-October. For more information about 2022 contract opportunities, visit: www.britishsugar.co.uk/media/news/latest