British Sugar life after quotas meeting

two-cylinder · Nov 14, 2015

I'd like to see an assured minimum price and a transparent profit sharing scheme providing a top up.
Say a basic £25 a tonne + the profit sharing element.

I don't think that's too much to ask, we deserve a profit and a return for our investment.
If it's too much then beet is unviable in Britain and time to close the factories.

solo · Nov 14, 2015

Farmer T said:
It feels like the last 5 years negotiations have been a chess match between NFU and BS. Now it's getting towards the end and BS have all the pieces. We grow it. Take all the risks. And BS depend on us, yet we can't seem to make it work.

That is exactly how it has always been as long as I can remember with bs. Us growers in the west were squeezed out with factory closures and poor pricing. It looks like a continuation of the same is going to happen in the east. At least there was a market for our quota and equipment when we were forced out., however I fear that will not be the case once the squeeze in the east starts to bite. Interesting times watching history repeat itself as far as I can see.

Farmer T · Nov 14, 2015

two-cylinder said:
I'd like to see an assured minimum price and a transparent profit sharing scheme providing a top up.
Say a basic £25 a tonne + the profit sharing element.

I don't think that's too much to ask, we deserve a profit and a return for our investment.
If it's too much then beet is unviable in Britain and time to close the factories.

In a fair world I would agree with this. BS would still make money at £25/t and if the sugar market picked up then returning the profit would reward both sides.

However William Martin basically said this wouldn't happen as apparently if we want to be exposed to the upside then we have to be prepared to take the downside.

He went on to say the current system already does that. In his eyes we are currently are protected from the downside. £24/t this year and £20.30/t next year doesn't seem like we're protected to me!

marshfarmer · Nov 14, 2015

Sonoftheheir said:
How about they grow more beet closer to the factories and pay more for them and stop subsidising long haulage to the factories from farms far away?

I don't think that's possible from what I see round here on the door step of the factory.

Brisel · Nov 14, 2015

What will closing the factories cost BS? At some point once the equipment is well depreciated they will do so but from what they have invested at Wissington I would say that they aren't ready to pack up just yet. If the gear still has life left in it will they ship it to China & set up there?

My guess is that they will have done their sums & worked out how little they can offer to get a few good growers making a bit of profit on it.

I wonder if we could have access to sugar futures markets to hedge production? A quick Google shows that sugar is traded in the Frankfurt exchange and via LIFFE in the USA so it's already possible to do if we can find a way to fix the currency at the time of the trade like we can for MATIF osr positions.

Sonoftheheir · Nov 16, 2015

Why does the NFU need to be in the tare house etc, don't they trust BS?

Why are they not in the flour mills, grain merchants checking on samples etc too?

Flat 10 · Nov 16, 2015

Seems that we are going to get another go at this, this time for each factory. Mine is in the evening so I will be going, you should have had an email today. I've been wracking my brains trying to think of the best option and I come back to base price negotiated 12months in advance followed by a top up (or not) depending on the world sugar price during the delivery period. I wouldn't be signing up to grow for more than 2 years at a time without something that would see me benefit from any increase in commodity prices. However I'm not sure that this is the best way. Surely the TFF collective have had some better ideas?

two-cylinder · Nov 16, 2015

Funny how the suggestion of signing up for more than one year has arisen when the price is rock bottom!

Jack Tat · Nov 16, 2015

As a business we have been growing beet for nearly 40 years but unless the price is the top end of £24/ ton I see little future in growing sugar beet.
How can British Sugar offer long term contacts when their own business decisions are so short sighted.
The NFU don't seem to have any standing power against them on negotiations. This has been proved enough times now.
We have reluctantly taken the decision the grow in 2016 but after that well I feel enough is enough!

Sonoftheheir · Nov 26, 2015

Did you go Tuesday @Flat 10 ?

I couldn't make it due to illness.

If so what was the word?

Flat 10 · Nov 26, 2015

Sonoftheheir said:
Did you go Tuesday @Flat 10 ?

I couldn't make it due to illness.

If so what was the word?

Um well, they will be paying more than £20 as they only have 71% of normal beet contracted for next year, there won't be an extra £1 for BS's own haulage, the existing arrangements will continue for those that want it and there is likely to be 2more mechanisms for pricing your beet and you will be able to put some of your tonnage into different pricing structures. One of which will be linked to BS profits. There was little appetite in the room to link beet price to the wheat price. I think these were the take home points although I'm sure I have missed some.

Sonoftheheir · Nov 26, 2015

Some progress then. £20.01 then!

moorgate · Nov 26, 2015

Nobody asked about surplus beet price which if working on tonnage will dilute price in a good sugar year . Was late to meeting so might missed that bit

two-cylinder · Nov 26, 2015

Deal will have to be generous to tempt 'growers on holiday' to return.

Flat 10 · Nov 26, 2015

moorgate said:
Nobody asked about surplus beet price which if working on tonnage will dilute price in a good sugar year . Was late to meeting so might missed that bit

Good point. I don't think it was mentioned. Email William Martin or one of the nfu reps (details in your campaign handbook), and see what they say. I have regarding something else, after all they did say they would listen!

richard hammond · Nov 26, 2015

Brisel said:
What will closing the factories cost BS? At some point once the equipment is well depreciated they will do so but from what they have invested at Wissington I would say that they aren't ready to pack up just yet. If the gear still has life left in it will they ship it to China & set up there?

My guess is that they will have done their sums & worked out how little they can offer to get a few good growers making a bit of profit on it.

I wonder if we could have access to sugar futures markets to hedge production? A quick Google shows that sugar is traded in the Frankfurt exchange and via LIFFE in the USA so it's already possible to do if we can find a way to fix the currency at the time of the trade like we can for MATIF osr positions.

Brisel, the hard core beet growers will keep growing at what ever price and hope it will all come good, and they will yield 80tonnes/ha.
BS investment in the industry is nothing when compared to the growers investment so why do they need to offer more money to grow.
This thread is just an extention to one running earlier in the year!

Honest john · Nov 28, 2015

What if BS pay us a land rent based on your 5 yr ave yield. On top of that agreed contract rates for the work input, they put the seed fert spray on the farm, harvest & cart the crop.

ie let them them take the growing risk ??

two-cylinder · Nov 28, 2015

BS won't pay a fair price until growers adopt the mindset: ' we only grow if the offer is good enough'.

Honest john · Nov 28, 2015

There does not seem to be much Beet around us. Much has been cleared to factory. That's at £24. Next year should give the roads a rest.

Last lift here today roads cleaned yet again.

I can't see the holiday makers going back to all this mud & Sh**t. With prices starting with a two.

Honest john · Nov 28, 2015

two-cylinder said:
BS won't pay a fair price until growers adopt the mindset: ' we only grow if the offer is good enough'.

What is good enough ? 30% margin over costs seems to be industry standard.

British Sugar life after quotas meeting

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0 %

Up to 25%

25-50%

50-75%

75-100%

100% I’ve had enough of farming!

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