Sugar beet prices are unlikely to fall much further in the coming years, one commentator has claimed.
Robin Limb, agricultural consultant and former director at the British Beet Research Organisation (BBRO), said the fortunes of farmers in the coming year would largely depend on their yields.
Contract prices for the 2016/17 beet crop were announced by the NFU and British Sugar in July at £20.30/tonne.
Mr Limb said: “[The price] is unlikely to drop again because this will send a lot of psychological messages to growers”
He suggested average beet yields would allow many growers to make a margin at current prices.
He said: “The UK’s five-year average yield is now about 73 tonnes/hectare following the record crop of 2014 and, coincidentally, and this is the likely average yield for the 2015 season.
“My crude and conservative calculations suggest at such yields there will still be a positive net margin at a beet price in excess of £20 per tonne, and equal to anything which may come off a combine harvester.”
The coming year is the final full year before sugar beet quotas come to an end in 2017. Discussion has been rife in recent months over how a post-quota industry may look and operate.
Speaking about this year’s contract price, William Martin, NFU sugar beet board chairman, said: “For an awful lot of growers the [2016/17 price] is close of cost of production. This is why we have seen a number of growers decide to take a holiday from the crop for the next year.”
But he claimed there was reason to be ‘cautiously optimistic’ about prices going forward.
“If you look at market reports, prices are turning a corner on a global and European level,” he said.
One things experts have often agreed on is the UK sector is already beginning to feel the volatility which will come in a less regulated sugar market.