The app helping UK sugar beet farmers to set crop prices

Whilst most arable crop growers have historically had a level of independence in choosing when to sell their crops, UK sugar beet growers have historically had limited choices regarding when to sell and for what price.

Now, through a solution on CZ’s App in partnership with the NFU, they can enjoy flexibility and independence. In 2022, farmers signed up to the solution were offered on average a 35% premium on the fixed price.

The National Farmers Union (NFU) went on a mission to find a solution to give UK’s sugar beet growers more independence whilst retaining price competitiveness for sugar processors.

In early 2019, the NFU approached Czarnikow (CZ), one of the world’s leading global commodities solutions organisations, to present the challenge.

CZ’s response was to create a bespoke, tech-led solution enabling UK sugar beet growers to have the same independence in selling their beet as other arable crops.

To ensure the solution worked and would be used by growers – it was quickly determined that if the buyers of the beet also had the incentive to allocate a percentage of their crop to a new futures-linked pricing model, the new solution could bring potential benefits to the growers and British Sugar alike.

© Czarnikow Group

As an intermediary, CZ was also able to offer growers the ability to independently choose when they locked in their beet prices rather than being tied to a fixed price.

CZ took ownership of the sugar beet submitted via the platform, so as to manage the world market future element as well as ensuring all flows could remain fully regulatory compliant. 

This solution was agreed upon, and CZ began development of a successful pilot scheme.

CZ used its in-house technology capabilities to build a bespoke pricing platform on its CZ App.

Growers now have access to real-time ex-farm prices derived from a live ICE futures and a FX feed via the app and based on a formula agreed by the NFU and British Sugar, the UK’s largest sugar processor.

Now in its third year, the futures linked beet price is once again offering significant price benefits to growers who are increasingly seeing the benefit of independent pricing through this model.

CZ are taking on more farmers for this year’s programme and rolling out the tool for other farming groups across Scandinavia.

NFU Sugar board chairman Michael Sly said:

“I am delighted that a third successful year of this pricing model being offered has once again allowed growers the opportunity to secure greater value from their beet crop.

It is something we have been working hard on for a number of years, in response to calls from growers for more control over their sugar beet pricing.

For me, the transparency of the platform allows me to see the value of the sugar I am growing in my crop and make independent pricing decisions based on that data.

This control over my pricing and visibility of the market allows me the flexibility to lock in prices at a time that suits my other business decisions and to take responsibility for the risk the market offers.

This can be a win-win for the industry. Growers are familiar with this concept in many other crops, and will be aware that markets can go down as well as up.”

Andrew Charlton, Associate Director and Head of European B2B Trading at CZ says:

“UK beet farmers and the NFU have been looking for a modal to manage their own price risk, as they do for many of their other crops. Historically the fixed price of sugar beet was agreed between NFU and British Sugar once a year.

The CZ app gives individual farmers the ability to fix the price of the beet on any day they choose. We recognise that every farmer is different, and every farmer has their own risk profile.

The CZ app allows each farmer to make their own price decisions, decisions that are suitable for their own businesses and their own families.”

More information about the beet pricing tool can be found here