Sugar beet price 2024

[robbie]

I know I keep banging on about it here and at the meeting but we/NFUS need to come up with a way of holding contracts on behalf of grower's. Then and only then will BS know that they can't win. At the moment they can keep chipping away at us with there offers and eventually the balance could change in there favour.

There was huge support in favour of the NFUs at the meetings and like I said there's never been a better time to do it, if we could get 50% support I think BS would be buggered and from the meeting I don't see a reason why that wouldn't be easily achievable.

The pledge was a good start but it is only a pledge there's nothing to stop any of us signing up but still pledging.

 

[Flat 10]

Most growers want a sweetener of £50 a ton with option to cash in on the markets.
Following this disastrous wet campaign getting beet to the roadside, it's a high input, high risk crop if seedbeds dry up with poor germination followed by soaking November December.

To say nothing of virus yellows, beet moth and frost. Some about here look shocking after that little amount of frost we have had already.
It's certainly high risk and high input, like spuds but without the peaks in sale price.......

 

[Flat 10]

Nfu sugar have sent us a response…..

 

[Iben]

Nfu sugar have sent us a response…..

For those of us who don't grow beet, but are interested in this thread. What was their response.

 

[Daniel]

For those of us who don't grow beet, but are interested in this thread. What was their response.

2024/25 SUGAR BEET CONTRACT: URGENT UPDATE FROM NFU SUGAR​ Since re-entering negotiations with British Sugar on 23 November, the NFU has worked tirelessly to find a compromise that protects you against the increased risks of growing sugar beet, gives you a fair price, and provides a realistic chance of you benefiting from buoyant sugar market conditions in 2024. For the avoidance of doubt NFU Sugar has not agreed the offer British Sugar has today communicated to growers, leaving the validity of any contract made in relation to this offer in doubt. However, be assured your collective voice has been instrumental in your negotiating team making the significant progress we have. Disappointingly, as yet we have not been able to conclude a deal, as British Sugar is in our view refusing to accept that growers must know the terms of each part of the contract they are signing up to, as explained in more detail below. Furthermore, British Sugar failed to mention that we had also aligned on seed orders being reset to zero to give every grower the same opportunity to order seed as usual and frost insurance being funded by British Sugar on the same policy terms as last year. The offer we have made has always been contingent on every element of the contract being aligned, as growers must be able to make an informed choice between all the options. We are only aligned with British Sugar on the other points in the contract subject to alignment on the terms of the futures linked contract, which have not been agreed. Futures-linked contract Growers have been clear in their desire for greater economic empowerment, which the futures linked contract delivers. We have therefore repeatedly made clear to British Sugar that the futures linked contract is an integral part of our package. We have maintained that growers must have the opportunity to opt for a meaningful exposure to the upside in the market, which we recognise could also mean exposure to the downside. In our view, it is essential to us that growers always know what they are signing up to, whether on the futures linked contract formula or any other term. As such we must come to agreement on the factor to be used in the formula. Furthermore, the outstanding points of disagreement on the futures linked contract (the ability for growers to place up to 50% of their CTE onto it, and the principle of agreeing a factor before growers sign up), are both elements British Sugar offered to us recently and has since withdrawn. As things stand, British Sugar has stated that they will now move to the arbitration process, notwithstanding that we believe the costs of an arbitration will far outstrip the cost to British Sugar of agreeing to the outstanding points. Statement from the NFU Sugar Board chair NFU Sugar Board’s chairman Michael Sly said: “With the outstanding disagreement on the contract of such small financial cost to British Sugar and yet critical to the full benefits of the contract being realised, we are astounded that British Sugar would choose to move to a costly arbitration process in preference to reaching agreement on this. “We have only achieved the significant progress we have made with British Sugar because of the overwhelming unity and support we have had from growers. More than 1,300, representing over 70% of the national sugar beet tonnage, have pledged their support for the vital role NFU Sugar plays in securing a fair sugar beet price for growers. Last week, hundreds of growers attended NFU Sugar meetings to voice their support, and well over 500 letters have been written by growers to their constituency MPs on this issue. “British Sugar can be in no doubt of the strength of feeling amongst beet growers and support for NFU Sugar as the growers’ collective representative body.”

 

[lloyd]

Doesn't look like much positive from a bystanders perspective.

 

[Sonoftheheir]

I should imagine NFU sugar is the fly in ABF’s ointment. I guess they don’t have intermediaries in contract negotiations in other countries where they have their growers and factories. They want to do as they wish and must hate the set-up we have here.

 

[Spud]

Its a bit disappointing that BS can't see a way to negotiate the futures contract to move the job on. They are selling sugar at close to an all time high price that was made from £27/t 2022 beet. The forecast is for the sugar price to stay high for a while yet, and there's plenty of £ to be made for them with beet at £40. There's three adjustable metrics that are negociable - the % of CTE allowed on a futures contract, the % of margin over threshold, and the threshold.
Beet growers have had a rough ride of late, but BS are not willing to share the gold when they are making plenty.

 

[Iben]

Are there specific reasons that BS have to make them so resistant to what NFUS is requesting?

 

[JonL]

BS seem intent on not doing a deal and blaming it on NFUS. Trying to end NFUS’ position as our negotiator. We need to support NFUS now more than ever

 

[Hindsight]

Its a bit disappointing that BS can't see a way to negotiate the futures contract to move the job on. They are selling sugar at close to an all time high price that was made from £27/t 2022 beet. The forecast is for the sugar price to stay high for a while yet, and there's plenty of £ to be made for them with beet at £40. There's three adjustable metrics that are negociable - the % of CTE allowed on a futures contract, the % of margin over threshold, and the threshold.
Beet growers have had a rough ride of late, but BS are not willing to share the gold when they are making plenty.

I think Spud BS are saying somewhat different. From the BS statement yesterday, i took it BS says it has supply contracts for sugar priced before the world market price rose. Presumably to Coca Cola, TESCO and the other retailers. And thus its sugar is not being sold at world price. And why BS wants to remove or reduce the futures price link as has no bearing on its sugar sales revenue.

 

[e3120]

I think Spud BS are saying somewhat different. From the BS statement yesterday, i took it BS says it has supply contracts for sugar priced before the world market price rose. Presumably to Coca Cola, TESCO and the other retailers. And thus its sugar is not being sold at world price. And why BS wants to remove or reduce the futures price link as has no bearing on its sugar sales revenue.

Every last tonne of sugar was already sold before the rises, including stuff not planted yet? Brave.

 

[Spud]

Are there specific reasons that BS have to make them so resistant to what NFUS is requesting?

All they have said is the NFU have rejected the offer they put on the table. Thats how negotiation works. NFUS wouldn't be much use if they just rolled over and accepted what BS offered. BS seem to of taken their bat and ball home over it.
FWIW I don't believe their claim that the futures contract is only taken by 1% of growers any more than them telling me last week that 60% of the 24/25 tonnage is on 2yr contracts so guarunteed to them (The truth is 11%)

 

[Spud]

I think Spud BS are saying somewhat different. From the BS statement yesterday, i took it BS says it has supply contracts for sugar priced before the world market price rose. Presumably to Coca Cola, TESCO and the other retailers. And thus its sugar is not being sold at world price. And why BS wants to remove or reduce the futures price link as has no bearing on its sugar sales revenue.

Thats not how I understand it

 

[Hindsight]

Every last tonne of sugar was already sold before the rises, including stuff not planted yet? Brave.

Goodness e3120 I am the last person to ask. Am just a hanger on! When I replied to Spuds post I was just qouting from the BS update email yesterday - and here is the relevant paragraph. The inference was / is that BS have fixed price sales. Maybe topic to enter into conversation with your fieldsman! You may find how commercially sensitive is that information.


As we have said before, we sell almost all of our sugar through fixed price annual contracts and therefore we cannot cover the risks inherent in the futures contract. If we agree a discount factor on the model, both ourselves and the growers who choose it will face greater risk. A small movement in the US dollar exchange rate, or world sugar futures price would present magnified price swings to growers, and potential losses to British Sugar of millions of pounds

All they have said is the NFU have rejected the offer they put on the table. Thats how negotiation works. NFUS wouldn't be much use if they just rolled over and accepted what BS offered. BS seem to of taken their bat and ball home over it.
FWIW I don't believe their claim that the futures contract is only taken by 1% of growers any more than them telling me last week that 60% of the 24/25 tonnage is on 2yr contracts so guarunteed to them (The truth is 11%)

 

[Hindsight]

Thats not how I understand it

Hi,

I was just going on the following paragraph in the BS contract update email from yesterday. I took it the inference being sugar sold forward at fixed prices lower than the now world price. But I have no idea. Cheers.

As we have said before, we sell almost all of our sugar through fixed price annual contracts and therefore we cannot cover the risks inherent in the futures contract. If we agree a discount factor on the model, both ourselves and the growers who choose it will face greater risk. A small movement in the US dollar exchange rate, or world sugar futures price would present magnified price swings to growers, and potential losses to British Sugar of millions of pounds

 

[e3120]

Goodness e3120 I am the last person to ask. Am just a hanger on! When I replied to Spuds post I was just qouting from the BS update email yesterday - and here is the relevant paragraph. The inference was / is that BS have fixed price sales. Maybe topic to enter into conversation with your fieldsman! You may find how commercially sensitive is that information.


As we have said before, we sell almost all of our sugar through fixed price annual contracts and therefore we cannot cover the risks inherent in the futures contract. If we agree a discount factor on the model, both ourselves and the growers who choose it will face greater risk. A small movement in the US dollar exchange rate, or world sugar futures price would present magnified price swings to growers, and potential losses to British Sugar of millions of pounds

Don't worry - it was a much more open question, from someone whose only involvement in the crop is to watch for a series of hard frosts to generate a flood of stockfeed.

The rather unique price determination process is interesting nonetheless.

 

[Spud]

Goodness e3120 I am the last person to ask. Am just a hanger on! When I replied to Spuds post I was just qouting from the BS update email yesterday - and here is the relevant paragraph. The inference was / is that BS have fixed price sales. Maybe topic to enter into conversation with your fieldsman! You may find how commercially sensitive is that information.


As we have said before, we sell almost all of our sugar through fixed price annual contracts and therefore we cannot cover the risks inherent in the futures contract. If we agree a discount factor on the model, both ourselves and the growers who choose it will face greater risk. A small movement in the US dollar exchange rate, or world sugar futures price would present magnified price swings to growers, and potential losses to British Sugar of millions of pounds

They apparently sell the sugar from the beet after it has been delivered, not before. So last years beet was delivered at £27/t when world sugar was in the 500 Euros/t level. Pretty much since then, its been either side of 700 Euros, so plenty of lollipops for the BS shareholders. The current threshold for the sugar bonus offered by BS is 740E - it has only just touched that level a couple of times in the last 6 months. Siad bonus is also dependent on the gas price staying below £1.50/therm - essentially they are arguing about nowt, if the threshold isn't met, they don't pay out, regardless of the proportion of the price lift they agree to share with the grower.

The buggers are frightened to death that we might for once make a few quid out of the crop!

 

[JR Rigby]

Has anyone actually seen what NFU offer is?

 

[Nitrams]

Goodness e3120 I am the last person to ask. Am just a hanger on! When I replied to Spuds post I was just qouting from the BS update email yesterday - and here is the relevant paragraph. The inference was / is that BS have fixed price sales. Maybe topic to enter into conversation with your fieldsman! You may find how commercially sensitive is that information.


As we have said before, we sell almost all of our sugar through fixed price annual contracts and therefore we cannot cover the risks inherent in the futures contract. If we agree a discount factor on the model, both ourselves and the growers who choose it will face greater risk. A small movement in the US dollar exchange rate, or world sugar futures price would present magnified price swings to growers, and potential losses to British Sugar of millions of pounds

Wernt BS profits up last year on higher paid beet price?....hmmmm