Sugar beet growers across East Anglia will have to weigh their options as the price of the 2026 crop is slashed by more than a fifth.

British Sugar and National Farmers' Union (NFU) Sugar sealed a deal today taking the price from £40 a tonne in 2024/25 to £33/t for up to 70% of their contract in 2025/26.

Despite the big drop, farmers' leaders believe it is a good deal in the current climate of "challenging" sugar market conditions.

Michael Sly, chairman of NFU Sugar and Keith Packer, managing director of British Sugar, said they believed it was "a fair deal".

The agreement includes a one-year contract with a guaranteed base price of £30.70/t plus an improved market-linked bonus and a futures-linked contract, for up to 50% of growers' contracts

Farmers can choose to split their tonnage between any of the contract options - meaning they can benefit from the upside should the market recover. 

Their current contract includes core price of £38 per tonne plus a market-linked bonus and a futures-linked option for up to 35% of their contract.

"We believe this is a fair deal. It ensures value in important areas and allows you meaningful opportunities to benefit from the upside should the market recover," said Mr Sly and Mr Packer.

"We have worked hard to come up with a range of choices which will suit different risk appetites, and listened carefully to your feedback to improve the options offered."

The market-linked bonus offers growers a greater share of any market uplift than before - starting at 30% and potentially rising to 32.5% with payment made during campaign.

Yield protection is also improved - with a guarantee a minimum payment for 85% of farmers' average yield.

Farmers will retain their Contract Tonnage Entitlement (CTE) in 2026 if they deliver at least 70% of their contracted tonnage in 2025/26. 

Farmer Kit Papworth - who farms at North Walsham and sits on the NFU sugar board - said with the price of sugar down it allowed growers to fix some percentage of their tonnage and consider their options.

Kit Papworth (Image: Kit Papworth)

"This is a good deal for growers in the current climate but we are expecting the area grown to be reduced," he said.

He currently grows 200ha of beet and would be reducing the crop area on his contract farms, he said.

Many farmers - like himself would look at other cropping options from Countryside Stewardship to alternative crops.

"I think farmers will see it as a fair reflection of the current market conditions with the potential upside for growers prepared to take those risks."

Mr Sly said: “The offer represents a fair deal in the context of the global sugar market. Importantly it provides growers with a range of choices dependent on their appetite for risk.

“The Yield Protection acknowledges the continuing threat of Virus Yellows disease and likelihood that the industry won’t be granted emergency use of Cruiser SB in 2025. The relaxation of the performance rules recognises that some growers may wish to grow less this year but retain their entitlement to grow as normal in future years.”

Mr Packer said the core price reflected the current downturn in sugar markets, but they had built in mechanisms which meant growers would share in any potential upside so if sugar markets do well, so could they. 

"Over the last few years, we have learned how important flexibility and choice is to our growers and have therefore made sure that these are at the heart of this year’s offer," he said.

“I’m now in my second year as managing director of British Sugar and I am passionate about working in partnership with NFU Sugar and our growers.

"We have redesigned our seed working model in collaboration and we are now building a different type of contracting model.

"We will continue to evolve and adapt how we work together. Growers are at the core of our homegrown sugar industry, and we will only succeed if we work together." 

Michael Sly (Image: NFU)