| FARGO, N.D. (AP) -- Low sugar prices will lead to lower
payments to Red River Valley sugar beet growers this year, and the
reduction is taking money away from the local economy, American Crystal
Sugar Co.' s president and chief executive officer says.
The company' s grower payments will be about $10 per ton less than
average, Jim Horvath said Thursday. That amounts to $100 million that will
not be coming into the valley, which results in an overall economic impact
of $250 million, he said.
The lower payments put many growers on the " ragged edge" of
barely being able to break even, Horvath said.
" That' s not a sustainable situation, " he said at a news
conference during the annual meeting of American Crystal and the Red River
Valley Sugarbeet Growers Association.
Horvath said American Crystal expects to make average gross per-ton
payments of $31.50, or about $680 per acre. Last year, the payments were
$37.31 per ton, or about $741 per acre.
The company harvested 9.6 million tons of sugar beets this year, about
the same as last year, he said.
Horvath said sugar prices have been forced down by a glut of the
commodity caused by high imports and increased domestic production.
Some of the sugar comes from Canada through " stuffed
molasses." Sugar is added to molasses and shipped to the United
States, where it is refined out of the molasses to avoid trade quotas,
Horvath said.
Sugar industry officials hope a court challenge will stop the practice,
he said.
The U.S. Department of Agriculture is holding between 750, 000 and 800,
000 excess tons of sugar, Horvath said.
Some of the surplus could be used to process corn into ethanol, said
Craig Halfmann, president of the growers association.
Recent tests at the Minnesota Energy ethanol plant in Buffalo Lake
found adding sugar can speed up ethanol production, resulting in more
sugar and corn being used, according to the American Coalition for
Ethanol.
Halfmann, who farms near Stephen, Minn., said sugar growers have asked
Agriculture Secretary Dan Glickman to consider using surplus sugar in
ethanol production.
The federal Payment In Kind Diversion Program sought to strengthen
sugar prices by allowing sugar beet growers the choice of taking some of
their crop out of production.
Minnesota ranked first among states in PIK diversions, with 36, 370
acres taken out of production. North Dakota and South Dakota were ranked
together in second place, with more than 16, 587 acres in the program,
USDA said.
Horvath said American Crystal will support a program like PIK next
year, but the government will not decide whether one will be offered until
after spring planting.
" We would certainly encourage it, " Horvath said. |