British Sugar has written to its 2,300 sugar beet growers to offer them a price of £38/t for the 2024-25 growing season – even though price negotiations are still not concluded with the NFU.

The two sides have been at loggerheads over an acceptable price for next year’s crop for months. They recently appointed an independent arbiter from the Centre for Effective Dispute Resolution to help in the process.

See also: NFU Sugar and British Sugar appoint arbiter in price dispute

But, with the clock ticking, British Sugar agriculture director Daniel Green has now made a formal contract offer to growers, suggesting this would offer “the financial security of a contract and the certainty of a guaranteed price as soon as possible”.

“Following significant pressure from growers, we have decided to offer you the choice to contract with us now and lock in your seed for next year, whilst we continue the negotiation and dispute resolution process with NFU Sugar,” he wrote.

The deal, should growers decide to accept it, includes a market-linked bonus, which would automatically take the core price to £40/t, should today’s sugar prices be maintained next year.

Other elements of the offer include:

• A yield protection product to mitigate against risk (for £1/t)
• A 20% cash advance to ease cashflow in the middle of the year
• A late delivery allowance to growers who choose to deliver after Christmas
• Free frost insurance cover

The letter adds that, should the commercial terms ultimately reached with the NFU be better than those British Sugar is now offering, growers will have the right to move to those new terms.

But if the final terms are worth less, then British Sugar will still stick to the £38/t it is offering now.

‘Outrage’

In spite of this, NFU Sugar says it is “outraged” that BS should make any such contract offer at such a delicate stage of negotiations.

“NFU Sugar has not agreed this offer, leaving the validity of any contracts made in relation to this offer in doubt,” said chairman Michael Sly.

At £38/t, the offered beet price is less than growers are receiving for the crop being lifted now.

British Sugar says this is justified and grower production costs have come down since last year.

But the NFU has pointed to the firm price of sugar right now and the good margins the processor is enjoying.