British Sugar has written to growers to confirm its current offer to NFU Sugar for the 2024/25 season.
The company said it was looking to give farmers ‘confidence' in choosing beet in their cropping plans'.
Earlier this month, NFU Sugar said the price offer from British Sugar was 'inadequate'.
In the letter, agriculture director Daniel Green said: "We know that last year you were facing a sharp increase in agricultural costs, and that competitor crops were offering attractive margins relative to beet.
British Sugar
"So, for 2023/24, we increased the beet price by 48 per cent to £40 a tonne and offered a yield protection product to help you manage risk in your business. We did this to ensure you received a fair price, offering a good margin, as well as giving you choice in how you built your contract to fit with your own circumstances."
He said input costs had now reduced, with prices of other crops falling at the same time.
But he said it was keeping its fixed price element as high as possible for 2024/25.
See also: Early beet announcement 'far too late'
"For 2024/25 we are aiming to offer you a fair deal that, like this year, builds a good margin for you as well as sharing any sugar market upside we may see. So far, we have not been able to agree a deal with NFU Sugar, but we wanted you to know that our current offer to them guarantees that the minimum price you will receive for beet will be £37.50 a tonne," he said.
He acknowledged sugar prices were currently high.
2024/25 contract offer
"But sugar beet planted in Spring 2024 is only sold as sugar between October 2024 and September 2025, and we have not agreed many sales contracts for that period yet.
"We simply cannot take all the sugar price risk in what is a very volatile market.
"So, we have designed a mechanism which allows us to pay you a market-linked bonus when pricing is agreed, and we know that we have had a reasonable crop."
He added if sugar markets in 2024/25 were the same as today, growers would get a ‘top-up' taking the overall price above £40/t.
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"You can also ensure a minimum guaranteed income through opting for our yield protection product, and we offer a futures-linked contract if you want more pricing risk," he said.
He added they were working hard with NFU Sugar to agree an offer, but were confident the current offer made the crop a 'compelling mix of high rewards and managed risks'.
