| SCOTTSBLUFF, Neb. -- Sugar beet growers for Western Sugar in
Nebraska and Colorado who hoped for a paycheck from the company this week
instead found that they owe the company money.
Farmers found amounts due to Western Sugar because the 1999 crop did
not bring a high enough price.
The negative balance resulted from contractual agreements and low sugar
loan rates, Western Sugar officials said. The deficit will be deducted
from the growers' initial payments for the 2000 crop, which will be made
Nov. 20.
Farmers contract with the company for loans at the federal Agriculture
Department's loan rate for sugar, which was $23.45 per hundredweight for
Colorado and Nebraska.
Because the sugar price traded for less than the loan rate, Nebraska
and Colorado sugar beet farmers ended up owing about $4.30 per ton to the
company.
Wyoming and Montana farmers, which had a lower loan rate than their
neighbors, ended up with a payment.
Western's agriculture director Kent Wimmer met with the board of
directors of the Nebraska Sugarbeet Growers Association this week to
discuss repayment methods for growers. Western, the growers' association
and financial institutions knew before planting season that the
possibility of a deficit existed, Wimmer said.
The relationship between growers and Western Sugar works much like a
cooperative, with all parties sharing in the costs and profit of sugar
beet production. Farmers invest and reap 60 percent, while the remaining
40 percent goes to the company.
Wimmer said capital cost deductions are usually taken from the final
payment, and this year there was no balance to cover those deductions.
Robert Busch, president of the Nebraska Sugarbeet Growers Association,
said this is the first time in his 41 years in the business that he has
had a deficit payment to make, but he knew it could happen.
The situation will be painful for those who did not plan for the
eventuality, Busch said.
"A lot of us use the final payment to pay harvest costs," he
said. "It will have to come from somewhere else now."
A growers cooperative is negotiating to buy Western Sugar from Tate
& Lyle America Sugars. |