Not so sweet for sugar beet growers 15 years on from EU deregulation

EU's beet crop halved since 2005 as pressure on growers increases
Not so sweet for sugar beet growers 15 years on from EU deregulation

Crop disease, low prices, and bad weather have made sugar beet unprofitable for many UK and EU farmers.

British farmers fear their sugar beet will go the way of the crop in Ireland, where it hasn’t been grown for sugar since 2006.

The crop is also in trouble in France, where last week’s freezing temperatures may have caused severe damage to newly planted sugar beet, adding to problems with crop disease and low prices in recent seasons.

More and more British farmers are giving up the crop, saying it’s no longer profitable to grow.

The UK’s National Farmers’ Union said recent measures by processor British Sugar are nowhere near enough to stop many growers giving up sugar beet for good when their current contracts finish.

The NFU’s Michael Sly said low sugar contract prices, and much greater risks of yield loss from disease, are making sugar beet a non-viable part of the crop rotation for many growers.

As a result, the area planted in 2021 is estimated to be reduced by 10-15%.

It follows a crop damaged by heavy rains in February, 2020, then the driest May since 1862, and more heavy winter rain which caused harvesting difficulties.

And a big winter carryover carry-over of aphids brought crop damage by virus yellows disease, spread by aphids.

This disease is a growing risk for growers in the EU and UK, who stopped using pesticide seed treatments to prevent virus yellows.

They were banned by the EU in 2018 because they pose a risk to bees.

Member states can still choose to authorise emergency use, and France took up this option.

But it is not known if French growers who replant crops damaged by last week’s frost can use the seed dressing.

The UK government this year gave permission in principle for use of the seed dressing.

This was condemned by environmental groups, and the industry isn’t using it in 2021, because weather analysis predicts only one-tenth of the aphid and virus levels in this year’s crop compared to the last crop.

Also, growers are protected by a British Sugar-funded £12m virus yellows assurance fund for the next three years.

About 3,000 farmers in East Anglia and the East Midlands produce more than half the sugar consumed in the UK.

They are contracted to produce about 8m tonnes of sugar annually for British Sugar.

The NFU estimates they lost £45m on the sugar beet crop harvested over last winter, mainly due to a 61% fall in yields.

Growers say they need a 68 tonnes/hectare (28t/acre) yield just to break even.

Prices paid to growers across the EU have gradually declined, following EU deregulation of its sugar industry in 2006.

Since then, sugar production ceased in five member states, including Ireland.

Nearly half of the sugar factories in the EU have closed, and beet acreage in the EU-28 decreased from 2,193,583 ha in 2005 to 1,313,697 ha in 2016.

British Sugar increased prices paid to farmers by 70p a tonne this year.

It also offered cash flow support which the NFU estimates is worth one penny per tonne on average.

But it’s not enough, says the NFU, which urged British Sugar to increase support for growers who risk big losses again this year by honouring their multi-year contracts, and proposed they be paid some of their 2021 contract in early summer, to help with cash flow problems which many growers face.

British farmers are also unhappy with labelling laws that allow cane sugar (grown with the help of pesticides banned in the EU and UK) processed in the UK to be branded with a Union Jack.

Some are replacing beet with oilseed rape or oats.

The beet works well in rotations, but can damage soil structure during winter harvesting

Meanwhile, the French growers' group CGB has initially estimated that between 10,000 and 40,000 hectares of recently sown sugar beet suffered massive frost losses that make replanting necessary.

The total French sugar beet area is estimated at 400,000 hectares, about 6% less than in 2020.

According to the European Commission, EU sugar production for 2020-21 was estimated at a five-year low of 14.4 million tonnes (12% below 2019/20), mainly due to the widespread virus yellows disease in France.

For the EU as a whole, the 12% fall in sugar production to 14.4mt could leave stocks at a 10-year low of 1.1m tonnes at the end of the season.

Before the French crop was hit by the late April frost, the Commission expected sugar beet yields to rebound in France, because of beneficial frosts in February, and the emergency authorisations for the use of neonicotinoids, which should limit the impact of pests and yellowing disease.

However, if last week’s crop damage causes a repeat of poor EU beet yields this year, processors could miss out on windfall profits from increased prices.

The global sugar price increased significantly between September 2020 and February 2021, by 26% for white sugar, and 33% for raw sugar.

EU prices remained stable in 2020, but increased to a three-year high of €388/t in January, 2021.

With world sugar production forecast to decrease slightly in 2020/21, and higher Covid-19 consumption of sugar, the global sugar market is heading for a nine-year low of stocks compared to consumption.

Disappointing harvests not just in the EU but also in Russia and Thailand hit the supply.

Sugar consumption is predicted to remain stable in 2020/21, with extra demand from a slow recovery of the foodservice sector, offset by a return to the long-term consumer trend of using less sugar.

After the poor beet harvest over the winter, reduced sugar production is expected to drive EU exports to a historic low of 0.8 million tonnes, just when rising prices could have helped out processors.

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