The U.S. Department of Agriculture will try to reduce the
country’s huge sugar surplus by paying sugar beet and cane
farmers to plow under a portion of this year’s crop in
return for government-owned sugar that was forfeited under
the USDA’s loan program.
The payment-in-kind plow-down plan is “a go,”
according to Pro Farmer America, a commodities marketing
information service in Cedar Falls, Iowa. Pro-Farmer’s
First Thing Today news service Wednesday morning said USDA
was going forward with a plan floated in Washington, D.C.,
last week.
Details of the program are sketchy, but by law, no
producer could receive more than $20,000, the equivalent of
15 acres of sugar beets, which is about 7 percent of the
average farmer’s production.
Tony Zitterkopf, agriculture manager for the Western
Sugar Co. plant in Billings, suggested that the program
might not fit the situation in Montana and Wyoming but was
better tailored for the Minnesota-North Dakota growers.
Western also has a plant in Lovell, Wyo., two in Nebraska
and two in Colorado.
Clive Rutherford, president of Tate & Lyle’s North
American operations, said last week that the company would
support anything the U.S. Department of Agriculture might do
to bring U.S. sugar supply and demand into balance. Tate
& Lyle is the parent company of Western Sugar.
Reducing the surplus would be difficult, he said, because
the proposal is limited to $20,000 per grower, and if every
cane and beet grower in the United States participated, that
would cut the surplus by 300,000 tons. The surplus is
estimated at 500,000 tons.
Devising a way to split up the payment-in-kind with the
growers would not be easy, Rutherford said. This is
necessary because the grower and the processor share in the
sale of the refined sugar.
In Montana, farmers harvested 62,400 acres of beets in
1998; in Wyoming, 53,400 acres. In addition to Western’s
plants, The Holly Sugar Corp. has refineries in Sidney and
Worland, Wyo.; and Torrington, Wyo.