News Poll sugar beets
Beet price must be higher, Cosun strategy agrees
Sugar beet growers find a suggested minimum price for sugar beet of €45 per ton too little. On the other hand, the majority agree with the new strategy that cooperative Royal Cosun has developed. In short, these are the conclusions after a round of questions among readers. Despite a higher allocation, the acreage will probably not increase further.
Boerenbusiness presented last Friday, February 18, a number of statements to gauge the mood among the subscribers of Arable Pro† Between 120 and 155 people responded to this. Despite the fact that the vast majority are not happy with the beet price and expectations, they do support the cooperative's new policy.
Beet price insufficient
Almost 80% say that the price of €40 per tonne of beets is substandard. 15% think it is in line with the market. With an average quality, the price comes to €38,91, which yields a financial result of €3.129 per hectare. That's meager, considering the cost. The many indignant reactions that followed are probably partly the result of high expectations. The sugar price climbed sharply in 2021. That gave advance confidence in a substantial price increase. That ended up being only €0,50. According to Cosun, earlier agreements, high costs and inflation have skimmed the price considerably. Chairman Dirk de Lugt also indicated that he was dissatisfied.
In an interview says the new CEO Hans Meeuwis that the cooperative must pay out at least €2025 per tonne of beet by 45. At least that is the new Unlock 25 strategy. 63% of the respondents say that this is too little and almost a quarter cannot answer this, because it is due to the cost price at that time. One in ten believes that this will cover the cost price marginally.
Vegetable protein as a booster
In short, the new Unlock 25 strategy means that the group wants to become less dependent on the sugar market and that it will focus on core activities related to beet cultivation and French fries potato cultivation with Aviko. Industries that are far removed from this will eventually be divested, although it is not said which parts those are. According to the company, the demand for vegetable protein should become the driving force behind structurally profitable beet cultivation in the future.
Nearly half of the voters say they agree with this policy and 30% wonder whether the new policy had not been the focus for longer. A quarter believe that sugar should remain the core of the company. A clear shift has been noticeable in recent years. For example, the name sugar completely disappeared from the company name of beet processor Cosun Beet Company.
division
Whether the market for vegetable protein will bring much remains to be seen. This segment is developing strongly, but almost every processor of vegetable products is jumping into it. For example, think of Avebe with their Solanic protein from starch potatoes. More than half of the voters are therefore uncertain about the opportunities and 22% say they certainly see it as an opportunity. The same percentage does not see it as a future perspective for beet cultivation at all.
The allotment rate will increase to 105% for this year. Theoretically, this means a beet acreage of 84.000 hectares. Last year it was 82.400 hectares. So an increase of 1,5%. A majority says in the Boerenbusinesspoll to sow the same area and almost a quarter sow less. About a fifth do indeed sow 105%. With these figures, the number of beets that are produced mainly depends on the growing conditions.
Highest European price
The reactions also show that growers are dissatisfied with the beet price, but realism prevails. Compared to prices elsewhere in Europe – including those of cooperative processors – Cosun is not doing so badly. The French Cristal Union pays €29 per tonne. The German cooperatives have not yet announced their prices. This also applies to the Belgian company Tiense Suiker, which falls under Südzucker. In 2020, this company paid €28,75 per tonne with 18% sugar. Iscal Sugar pays out slightly more at our southern neighbors. European figures for 2020 show that the highest beet price is paid in the Netherlands. Of the 13 countries surveyed, Belgium has the lowest price, not including the United Kingdom.
Growers are less positive about the suggested minimum price of €45 per tonne. They expect to see the cost price rise in the coming years and that includes another figure that starts with at least a five or six. An above-average grain price is causing arable farmers – especially on clay soil – to reconsider cultivation. Especially with a price guarantee under €50.
Effects
Are we going to see the dissatisfied voices in the acreage? Many growers have already drawn up their construction plan for 2022. A few quickly switch to renting or selling LLBs to a colleague. Something that usually happens just before the end of the year. A decrease is unlikely, but neither is an increase. If only because of grain prices and the pressure on land in general. There is certainly enthusiasm for cultivation in the (north) east of the Netherlands, because the cost price is lower than on clay soil.
For the medium term up to and including 2025 and beyond, it remains to be seen. Grain and sugar prices are volatile. The cost price will be further negatively influenced during this period by a sky-high fertilizer price, which is expected to level off in the longer term. Nevertheless, the costs of other inputs such as crop protection, labor and mechanization continue to rise. With protein strategy or not, the beet price has to go along to offer perspective.
Niels van der Boom
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