U.K. Farmers, British Sugar Agree on 13% Increase in Beet Prices

(Businessweek) – U.K. sugar beet farmers and British Sugar Plc, the country’s only processor, agreed on a 13 percent increase in the price paid for the 2014-15 crop.

The price to be paid for beets in the season that starts in October 2014 was set at 31.67 pounds ($50.71) a metric ton, the National Farmers Union, which represents 3,500 sugar beet growers, said in a statement on its website. That’s up from 28.01 pounds in the 2013-14 season. In June, farmers rejected British Sugar’s offer of 30.67 pounds a ton.

The deal “recognises the difficult growing seasons experienced in recent years and grower concerns relating to longer campaigns,” William Martin, NFU sugar chairman, said in the statement. “We hope that with the price now agreed, growers will be able to complete cropping plans for the 2014 harvest.”

U.K. sugar output is forecast to fall 4.4 percent to 1.1 million tons in 2013-14, the European Union estimates. Harsher winters and longer processing campaigns have made the sugar beet a more risky crop for farmers, Martin said on Aug. 7.

The impasse between British Sugar, owned by Associated British Foods Plc (ABF), posed a risk for the size of the crop, as growers would opt to switch to other crops if they didn’t get a fair price, Martin said in the same interview.