The changes to the EU Sugar Regime mean for the first time in almost 50 years growers will be free to produce as much beet as they can sell. That is the same for existing growers or arable farmers who want to enter the market. With all the major processors across Europe looking to expand production, and many actively seeking new growers to come on board, there are good opportunities. First refusal for contracts and expanded tonnages will most likely go to existing growers, at least initially.
Even so growers are being advised to look at introducing beet, both for its potential profit and because of its value within a rotation.
Beet is a spring-sown crop so provides a winter break, offers an opportunity to tackle weeds and it is beneficial for biodiversity. It is also deep-rooting and breaks down the soil profile improving the structure.
Even though exposure to world market prices will limit prices the crop can still make financial sense. Processing companies are aware that their facilities have only one use - to handle beet. They will therefore have to pay a price that will encourage growers to drill beet and secure a continued supply to make efficient use of their assets.
Prices beyond 2020 are extremely difficult to predict but estimates would suggest that it could be between €25-30/tonne.
Even if the price is as low as €25/t, on farms where yields are at 100t/hectare, that would still represent a decent income. Additional attractions are that processors contracts are guaranteed and paid up without quibble. In the UK three-year contracts are on the table and these come with a guaranteed base-price that will increase if market prices start to rise.
The main variable is yield but backed by a robust research and development programme, there is a strong upward trend which shows no signs of abating.
However, there are downsides that must be considered before growers make a commitment.
Chiefly transport costs are notoriously high. Sugar beet is 75% water and as the crop is harvested during the winter, mud, muck and stones add to the weight.
This is the major reason for the trend towards production being located close to factories.
Another potential downside to growing beet is the harvest time. For the industry to be profitable, factories need to run between September and as long into the following year as possible. The pressure on factories to extend the harvest campaign well into the spring, will only intensify as prices are squeezed and processors bid to make the most out of their assets. Longer campaigns will be one of the first visible changes post-quota. More than ever, it means that growers have to be prepared to lift beet during the worst weather and soil conditions.
On lighter soil it may not be problematic but on heavier ground conditions could rapidly deteriorate. If the factory needs the beet there is no option but to harvest and the potential for compaction and general mess is huge.
In a wet winter the damage to soils can have a significant knock-on effect on subsequent crops. This may result in in yield penalties for several years and is not easily or readily rectified, but tends to be overlooked by growers once the ruts have been power-harrowed level, and the season confined to history.
From 2017 onwards, the longer campaigns and extended growing areas mean a second physical change that will be apparent to growers is the need for an increased focus on the post-harvest management of their crop. Long campaigns mean that beet will have to be stored longer, in actively managed clamps to ensure the beet does not deteriorate and become unfit to process. The cost of building, managing and maintaining large well ventilated clamps with good access for cleaning, loading and delivery is significant, but is critical to ensure the crop is successfully despatched to the processor.
These changes will occur very rapidly and for many growers will become apparent as soon as the next crop in 2017/2018 is lifted.