| TRACY, Calif. (AP) -- California's sugar beet farmers, who
once produced a year-round supply for nine refineries scattered from the
Imperial Valley to the Oregon border, are looking for other crops to plant
as two of California's four remaining sugar processing plants plan to
close this winter.
Disastrously low sugar prices and the rising cost of California land
have just about killed off the 120-year-old industry.
The two latest to fail are the Spreckles plants in Woodland and Tracy,
areas whose proximity to San Francisco and Sacramento have made them prime
targets for suburban development. The land rush has driven prices to
record levels.
"Oh, man, it's horrible. It really has implications all over the
dadgum state," said Ben Goodwin, manager of the California Beet
Growers Association.
"When these two plants close, there's no other place to go. The
two remaining plants will have all the beets they need," Goodwin
said.
The factories, owned by Imperial Sugar Inc. of Sugar Land, Texas, are
closing because the land value is greater than the earning value of
plants. The closures will put about 580 permanent and seasonal employees
out of work.
"Those factories have relatively high operating costs and so they
couldn't support themselves. In addition, the land is very valuable, so
the focus was to free it up for sale," Imperial Sugar Vice President
Bill Schwer said.
The company offered to sell the refineries to California's sugar beet
farmers in February, but so far a committee of growers have not been able
to figure out a way make the operations profitable, Goodwin said. If the
farmers can't come up with a way to buy the plants and keep them open,
Schwer said they will stop processing sugar beets by the end of the 2000
season.
Neither Schwer nor Goodwin would say how much the company is asking for
the properties.
California's 500 beet farmers, working about 115,000 acres, accounted
for about 8 percent of the roughly 5 million tons of beet sugar produced
in the United States last year. California's crop is expected set
production records with 34 tons of sugar beets coming off every acre.
That's 2 tons higher than ever before, Goodwin said.
But overproduction nationwide has been driving prices down for much of
the 1990s. Since 1995 prices have dropped about 30 percent to $22 per 100
pounds of refined sugar. A fourth of that decline has hit since December
1999.
The U.S. Department of Agriculture estimates that the wholesale price
for beet and cane sugar has dropped to an 18-year low. The soft sugar
market is putting pressure on farmers and processors all over the country.
"I've seen the market go up and down, of course, but I've never
seen it this depressed," said Neil Hamilton, who grows sugar beets,
wheat and other crops on about 2,000 acres in the Sacramento-San Joaquin
Delta.
In September, 300 workers lost their jobs when the U.S. Sugar Corp.
plant in Clewiston, Fla., began a cost-cutting program. The announcement
came a week after two of the state's biggest growers forfeited $17 million
in sugar to repay government loans.
In the Rocky Mountain states, growers are trying to come up with the
money to buy Tate & Lyle's six sugar factories in Colorado, Nebraska,
Montana and Wyoming. The company announced in May that the depressed sugar
market is driving it out of its operations in those states.
In Hawaii, Amfac/JMB Hawaii Inc. plans to close its two mills on Kauai,
lay off 400 workers and sell more than 17,000 acres of land. Also,
Alexander & Baldwin Inc. plans to close its sugar plant on Maui.
In an effort to reduce the national oversupply and hopefully increase
the price a bit, the USDA announced a program in late August to pay
farmers up to $20,000 each to destroy part of their sugar beet crop this
year.
About 3,100 acres in California are registered under the program so
far. |