In the first clear indication that the Mallow sugar plant in Co Cork may close this year, a letter to growers from Greencore casts doubt on the commercial logic of processing the 2006 crop.
Greencore has told its 3,700 growers that there are "substantial risks" attached to processing a 2006 beet crop.
"The company would like to process beet in 2006 but before a decision is made, the company must engage with its partners to see how these risks can be mitigated/eliminated," chief executive Seán Brady wrote.
The EU will pay €146 million in compensation if the plant closes down. Farmers are demanding most of this money if the plant is closed.