| Growers in Nebraska, Colorado, Wyoming and Montana received
their initial payment for the 2000 sugar beet crop. Payments were mailed
to growers on Monday. Rick Griffith, ag manager of Holly Sugar in
Torrington, said the initial payment for growers who raise beets for the
Torrington factory was $25 per ton, based on 15.6 percent sugar.
"This figure represents 80 percent of the total payment,"
Griffith said.
A second payment will be mailed to growers in early April 2001 and the
final payment will be mailed in late-October.
Griffith said the payment is based on the anticipated net selling
price. He explained that Holly Sugar has a marketing department that gets
a fix on what sugar will sell for. "We base our first two payments on
a projected selling price," Griffith said. "Our final payment is
based on the actual net selling price. This is a system we've used for a
number of years and it works extremely well for us."
Kent Wimmer, director of agriculture for Western Sugar, announced the
company's first interim payment to growers.
The payment totaling $91,464,309 represents $28.35 per ton based on an
average sugar content of 15.51 percent.
Wimmer said he was satisfied with the yields of the 2000 crop, but
disappointed with the sugar percentage. Western's payment is based on 70
percent of the No. 14 raw sugar price or 80 percent of the regional loan
rate, whichever is higher.
Wimmer said the loan rate is currently the higher of the two. In
Nebraska and Colorado, the loan rate is currently $23.67 per hundredweight
and $22.68 per hundredweight in Montana and Wyoming.
Wimmer added also that the interim payment issued in March 2001 will be
based on 80 percent of the No. 14 raw sugar or 90 percent of the loan
rate, whichever is higher.
The final payment issued in October will be based on the average net
selling price.
Wimmer said growers in Nebraska and Colorado will have deductions taken
from their initial payment as a result of an overpayment of the 1999 crop.
Wimmer said the deduction will amount to 22 cents per ton, which is mostly
to pay for the grower's portion of capital investments in the company.
"Prices remain disappointing," Wimmer explained. "They
have stabilized, but are still at a 25-year low. We are hopeful that
prices have at least bottomed out." Programs like the Payment-In-Kind
program (PIK) and the government purchase of sugar have helped to
stabilize prices, Wimmer said, despite another big sugar crop this year.
"These sugar prices will definitely help cull the herd,"
Wimmer said. Three sugar factories in the United States have announced
plans to close.
Wimmer said a bill was introduced in late October in the House of
Representatives regarding the Stuffed Molasses issue. If passed, the bill
would stop the circumvention of the tariff-rate quota from stuffed
molasses, Wimmer explained.
The United States and Mexico are still deadlocked over the amount of
sugar that could be imported into the United States under the NAFTA
agreement. |