Outlook 2025: Sugar beet prices depressed but break even
© GNP When the 2024-25 campaign contract offer was finally announced in December 2023, many growers felt the headline price of £40/t did not reflect the futures market, which suggested a value of about £60/t.
The option to market up to 35% of contract through the futures-linked mechanism seemed like a logical approach for the more risk-taking grower base, says Andersons director Jamie Mayhew.
Unfortunately, the world sugar price has mirrored the grain market and fallen. Those who accepted that standing on at £40/t was still a profitable exercise are feeling rather content.
See also: UK wheat market still tight in 2025 despite larger area
In summary
- Despite the lower 2025-26 contract price, a dramatic drop in grower numbers is not expected
- Sugar beet remains one of the few break crops budgeted to break even at net margin level
- For some growers, the new contract price may not be enough due to the knock-on effects on soil, farm infrastructure and following crop yields
Surprisingly, negotiations for 2025-26 have been quicker than for the previous year, with the contract offering announced in July 2024.
The falling profitability of alternative crops meant a drop in the beet price was inevitable.
A fixed price of £33/t for up to 70% of contract tonnage is the headline.
To share some of the market risk, growers must choose to market at least 30% of their contract tonnage on either a market linked bonus contract, with a minimum price of £30.70/t, or a futures linked contract (up to 50%), with no minimum price.
The mechanism for both options has been rebased for 2025 drillings.
Growers who can afford to live without sugar beet might choose to do so, but despite the disappointing reduction in contract price offered, a dramatic reduction in grower numbers is not expected.
Sugar beet remains one of the few break crops in the rotation that is budgeted to break even at a net margin level.
For some growers, this may not be enough – while the 2024 crop looks reasonable, there are some considerable knock-on effects from growing it.
Early harvesting was again a challenge after relentless rain over a short period in September, topped up by average October rainfall.
However, favourable conditions in November resulted in growers harvesting large areas, putting pressure on factories to keep up with deliveries.
For the second year in a row, damage to soil structure could cause serious knock-on effects to following crop performance and undo years of soil management work.
The damage to farm infrastructure is also considerable as a result of continuous wet conditions.
The 2024-25 harvesting campaign may be a decider for some.