News & Events - Archived News

Rocky Mountain Sugar Growers Cooperative reps answer questions for area producers

Three hours of presentation to approximately 200 growers and bankers addressed a lot of concerns generated by the proposed buyout of Western Sugar by its growers.

Rick Dorn, president of Rocky Mountain Sugar Growers Cooperative, along with Randon Wilson, co-op attorney, answered questions regarding the purchase during the formal presentation. Other co-op board members later fielded questions. They were Robert "Bob" Busch of Mitchell, Kevin Hall of Bridgeport, Rick Rodriguez representing Wyoming, and Roger Nedens and Everett Gabel from Montana.

According to Busch, one of the main grower concerns is the earn-out provision of the purchase agreement. Under the clause, Tate & Lyle may be paid up to an additional $25 million over a five-year period if the price of sugar increases. It would be paid on a graduated scale over that time. If prices do not go up, nothing above the $78 million purchase price would be paid.

Another item of interest was the tenant/landlord arrangements that will be made by those buying into the co-op.

"You cant buy delivery rights for the same acreage," Wilson said. "Tenants need to know where theyll grow their beets, and landlords need to know who will grow them. They need to get together."

A pool of acres will be available for those short on acres, according to Wilson. It will consist of acres designated by growers with an excess.

"To keep it legal, when these acres go to a different grower, a short-term transfer will be made," Wilson explained. "Well have trained staff to help with the paperwork."

The transfers will involve a fee, also. Dorn explained the fee will be paid to the grower transferring the acreage. The exact charge will be determined by the existing market.

"Anybody can buy shares if they can deliver the beets," Wilson said.

A priority list of growers will be maintained. First priority will go to growers who have supported the purchase from the beginning. Next priority will be those requesting more acres, and the third level will be those wanting new acres or just getting into farming.

"Well work with anybody who wants to get started," Wilson said.

The attorney said the biggest threat to the purchase is the growers who only want to fulfill the existing two-year contract with Western Sugar, which will be honored by the co-op.

"If they hold out, and we dont get the acres to make this work, the whole thing is gone," Wilson explained. "Even if you are an old geezer who knows hes quitting in two years, buy into it now and sell your shares in two years."

According to Busch, grower concerns were the same in all the meetings.

"There were questions about the earn-out, but once the growers heard Randon explain it, they seem to be satisfied," he said.

"If this deal isnt consummated in the next two weeks, beets will be a thing of the past and all the equipment around here will be worthless locally.

"We have to buy or theyll be gone."

Richard Groskopf, Gering Valley area farmer, said he thought the meeting explained a lot of questions stirred up by the rumor mill.

"Anybody who wants to keep sugarbeets here will participate in the buyout and make it succeed.

"Its a decision each person has to make. If a farmer can buy in, it sounds like there will be a long-term pay off."