| MOUNTAIN HOME -- The big news for the year 2001 in the sugar
industry is that by the end of the year almost all sugar beet factories
will be owned by farmer coops, says Snake River Sugar Company Chairman
Terry Ketterling.
The low prices of the past year have put such a pinch on individual
owners that if those privately owned factories have a prayer of staying
viable, it will be as a result of buyouts by newly formed cooperatives.
"The survivors will be co-ops," Ketterling said.
"There's not enough margin today to share with an owner of a sugar
company is what it amounts to."
Too much sugar on the market is the reason for the current low prices
-- too much produced domestically as well as too much being shipped in, or
potentially shipped in.
"You have to remember for the 2001 crop we'll be planting in March
in April, we won't finally get everything sold and determined until the
middle of 2002," said Ralph Burton, vice president of Amalgamated
Sugar Company in Salt Lake City.
But as California plants close for good and other plants work toward
farmer buyouts, the perception is that somewhere down the road, there is a
likelihood of less sugar on the market.
That perception of less sugar on the market in 12 to 18 months from now
could elevate prices, and that is why Burton cautiously predicts that the
coming crop might sell for $1.50 to $3 more by the time it gets to market.
He points out that it's a world market he's referring to, which takes
into account imports from Mexico and the stuffed molasses coming from
Canada into Michigan.
"Whether real or perceived, it's future trends we're talking
about. When you start talking about the world situation, you're talking
about treaties, agreements and all kinds of things like drought and crop
failures," he said. "But it has always appeared to me that we're
going to resolve this thing (low prices), and if it has to, the government
will resolve it."
And American Sugarbeet Growers Association Vice President Luther
Markwart concurs.
He said officials from the U.S. government are watching the import
situation very closely and are determined to make sure the domestic
industry survives.
"There are people in the government watching this closely,"
he said. "Right now we have 800,000 tons of sugar in inventory.
"They'll watch world and domestic prices, and if the gap gets too
big, they'll take some of that government sugar and put it back on the
world market to soften the price."
He said no specific government policy has been developed yet regarding
imports.
"But I can tell you this: Our people are watching this very
closely," Markwart said. "We are not powerless in this." |