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California Beet Growers Association Bulletin

IMPERIAL OFFERS TWO FACTORIES TO CALIFORNIA GROWERS

Imperial Sugar Company, the owners of Spreckels, Holly, and Michigan beet processing facilities, has offered their Tracy and Woodland factories to growers. According to company officials, Tracy and Woodland have the greatest land value of their 11 beet plants, and they have offered these factories to the growers on a "land value" basis.

These factories are located in the growth corridors of the San Francisco Bay Area. Woodland is situated on approximately 780 acres of agricultural land with a portion that could possibly be rezoned for commercial purposes. The Tracy plant sits on just over 1,400 acres of agricultural land, in a flood plain, that is adjacent to commercial and residential real estate adjoining the rapidly growing community of Tracy. The company is currently having both the properties appraised to determine a market value for this real estate.

In their proposal to growers, the company indicated that, in time, they might be interested in selling all four California factories. The company has also stated they would require growers to retain Imperial Sugar as the marketing agent for sugars produced at Woodland and Tracy. The arrangement to reimburse Imperial for this service would be based on the value of sugar sold and would be for sales, logistics, credit, customer service, billing, and other functions of a sales department.

During the C.B.G.A. Annual Membership Meeting on February 17, the members in attendance voted unanimously to fully investigate the purchase of the two factories with the final objective of owning and operating all four factories in California.

The Association's Board of Directors appointed a committee to investigate the possible purchase. The committee's efforts will be coordinated through the C.B.G.A. office. Members of this committee and their alternates are:

The committee is currently in the process of securing financial, legal, and appropriate appraisers to fully evaluate the possible purchase.

The committee has set a target date of March 22 to complete its analysis to determine if the proposed purchase is feasible. Mr. Kempner, CEO of Imperial Sugar Company, indicated that if "some sort of transaction is in hand or a financial arrangement is secured," he would consider extending the deadline for operation of the two factories until after spring harvest in 2001. In the company's original proposal, the company set a deadline of the end of campaign in calendar 2000 to close Woodland and Tracy if growers did not purchase them.

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C.B.G.A. ANNUAL MEETING

The C.B.G.A. held its Annual Membership Meeting in Newport Beach, California, on February 16 and 17. As a part of these meetings, the C.B.G.A. Board of Directors held meetings on Tuesday, February 15 and Thursday, February 17, and heard reports from the Board's standing committees and developed policy for 2000.

Officers Elected:
James Nilsson of Manteca was re-elected president of the C.B.G.A. during the Thursday, February 17, directors meeting. Ted Page of Buttonwillow was re-elected vice president at this meeting. Ben Goodwin was re-elected secretary-treasurer, and Judy Hinkle was re-elected assistant secretary.

2000 Crop Dues:
The C.B.G.A. Board of Directors has set the dues at 12.5 cents per ton of beets produced for the 2000 Crop. This rate has been in effect since 1990. The new budget adopted during the directors meetings includes estimates of costs to fully evaluate the possible purchase of the Woodland and Tracy factories. It is estimated that because of the regular budget items and financial and legal advisors to investigate grower ownership of the processing plants, it will be necessary to draw from Association reserves.

The directors-at-large were elected at the Annual Membership Meeting. These are:

The other directors of the state Association are the district presidents, elected during the District Meetings in the latter part of 1999. These are:

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NETS FOR 2000

The Spreckels Sugar Company officials have projected the Net Selling Price for the Imperial Valley sales year ending February 29, 2000, at about $25.00. For Northern California, because of the recent drop in refined sugar prices, the net will be in a $24.00 NSP range when the sales period ends June 30, 2000. The company reported that, last year at this time, refined values were in the $27.00 to $28.00 per cwt. bulk basis range. Currently, the prices are in the $23.00 to $24.00 range.

The cause of the price decline is an oversupply of sugar in the U.S. There have been substantial production increases in domestic beet and cane supplies, a flat consumption growth, government trade policies that have fixed the amount of imports to enter the U.S. under the Tariff Rate Quota (TRQ), and border leakage of stuffed molasses and high test molasses entering the country outside the TRQ. The result is the highest stocks to use ratio since the government used this indicator to adjust inventories of sugar in the U.S.

The latest government estimate of U.S. sugar supply and demand in the WASDE report is as follows:

Released to Printer:  2/23/00
Distribution Date:  2/24/00