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Photos by Darin Oswald / The Idaho Statesman

Drew Eggers farms 600 acres in western Ada County. He grows sugar beets on 140 acres of that land and trucks them to the Amalgamated Sugar Co. a few miles away. Eggers is becoming concerned about the economic future of farming and has considered selling his land.

About 12,000 tons of sugar beets are processed at The Amalgamated Sugar Co. in Nampa every 24 hours when the factory is in operation.

Drew Eggers inspects his sugar-beet field, near Black Cat and Amity roads in May 2000.

Drew Eggers' family has farmed in western Ada County since his great-grandfather Fred broke ground there in the 1920s, but the family tradition may end sooner than he'd like.

"If this is a bad year, I'll probably think about slowing down on farming and doing something else," he said. "I thought about quitting last summer. The problem is, you'd be selling your land to another farmer who's not making much money."

In Elmore County, Tim Corder would like nothing better than to stop growing the sugar beets he's raised for nearly 30 years. He's advertised his shares of Amalgamated Sugar Co., which growers purchased by forming a cooperative in 1997, in a farm journal and on the Internet -- without success.

"Not a single response," he said. "There were four or five of us trying to sell when I put my shares on the market. Now there's 20."

Eggers, Corder and scores of other Idaho farmers share a bond of growing a crop they wish they didn't. Infamous for the foul aroma that wafts from their refineries, sugar beets historically have smelled like money to those who raised them. Now, rising production costs, loan payments on the Amalgamated purchase, tumbling sugar prices and foreign competition are turning sweet profits into losses and threatening the future of Idaho's fourth largest crop. In turn, that could lead to problems for growers of potatoes and other crops, threatening agriculture and economies in Idaho and beyond.

The situation so alarmed a group of Cassia and Minidoka county growers,

unofficially known as the Sugar Action Committee, that in October they commissioned an update of a University of Idaho study with a provocative theme: What would happen if Idaho farmers were forced to stop growing sugar beets?

Most farmers would put former beet acreage into other crops, increasing supplies and further lowering prices of already depressed commodities such as potatoes.

"What do we do if we can't save the beet industry?" asks Darrel McRoberts of the Idaho Department of Agriculture. "Do we flood the grain market? Do we plant potatoes and flood that market?"

Flooding the potato market, according to the U of I study, would result in a $105 million annual loss to growers of Idaho's signature product.

"Potato prices already are so low that one of the co-ops in eastern Idaho is dumping half a million pounds," said John Gallian, co-author of the U of I study. "If farmers quit growing beets, it would be even worse."

The impact on nine other potato states, from Washington to Maine, would be more than $512 million annually. An estimated 11,000 Idaho workers, including seasonal employees, would lose their jobs. That's more than work at Micron.

Whether the worst-case scenario happens depends on factors beyond growers' control, and far beyond Idaho's borders. Prices paid for Idaho sugar beets are influenced by factors as diverse as trade negotiations in Washington, D.C.; sweeteners used in Mexican soft drinks; and sugar-cane harvests from Louisiana to Argentina. In an increasingly global market, farmers eye the evolution of the North American Free Trade Agreement as closely as they watch the weather.

In Idaho, 1,200 farmers grow sugar beets on 212,000 acres in southern Idaho from Aberdeen to the Oregon border. The state is second only to Minnesota in sugar-beet production. The crop has been profitable for generations of Idaho farmers, but now growers are caught between rising production costs -- diesel fuel, electricity and fertilizer have risen dramatically -- and plummeting market prices.

"Two years ago, I got diesel for my tractors and diggers for 50 cents a gallon," Eggers said, referring to tax-exempt fuel prices paid for off-road ag equipment. "Last week, I paid 97 cents and thought that was a good deal. Diesel for the trucks has gone from $1.05 a gallon to $1.65. Idaho Power is supposed to raise rates 25 percent this summer. I furrow-irrigate, but farmers with sprinklers will get hit by that increase. And the fertilizer we use is processed with natural gas. It's gone up over 50 percent in the last year."

Growing sugar beets takes a lot of water. To some growers facing rising electric bills to pump water to their crops, Idaho Power's offer to buy back their power contracts to save electricity may be tempting. But drying up their fields and not growing sugar beets would shorten the refining season, jeopardizing employment for hundreds of workers.

At the same time that growers' costs are skyrocketing, bumper crops and a sugar surplus are predicted to lower the price they'll get for their 2000 crop. Yields and surpluses were so high that the U.S. Department of Agriculture paid farmers to plow under part of their sugar beets rather than harvest them.

"I disked under 10.7 acres and got more than I would have if I'd sold the beets," Eggers said. "If I could have disked under the whole crop, I'd have come out better."

Even with beets plowed into the ground, prices for the 2000 crop are expected to drop about 25 percent.

"When you look at what it costs to grow an acre of beets and you look at the price, the profits are gone," said Mark Duffin, executive director of the Idaho Sugar Beet Growers Association. "When the price drops 25 percent, you aren't breaking even. You're losing money."

Beet growers aren't alone in facing vanishing profit margins. Surplus production also has depressed markets for potatoes, beans, wheat and alfalfa. All farmers are faced with rising fuel, fertilizer and power bills, but sugar-beet growers have an added problem. The Amalgamated purchase, intended to help growers by allowing them to share in the refining profits, has obligated them to loan payments at a time when profits are non-existent.

To buy Amalgamated and its plants at Nampa; Twin Falls; Rupert; and Nyssa, Ore., the growers formed Snake River Sugar Co., a cooperative. The co-op used a loan to pay roughly two-thirds of the $266 million purchase price. The remaining third was paid by individual grower-members, who borrowed to pay their share of $400 for each acre planted in beets.

In theory, sugar profits cover individual loan payments, the co-op's loan payments and the plants' operating costs. But as sugar prices have dropped, the co-op has had to use money that would have gone to its members to cover its operating costs and loan payments. In 1999, $3.21 of the $42.30 growers got for a ton of beets was withheld as a "unit retain."

A $4 unit retain is expected for the 2000 crop. If its value drops 25 percent, as predicted, farmers would get less than $32 a ton for their sugar beets - or less than $28 a ton after the unit retain. That's the lowest since 1978 - and the reason farmers are looking for ways not to plant sugar beets.

"You have to be an optimist to be a farmer, so I guess I'm an optimist" Corder said. "But I can't grow crops year after year that lose money."

Sugar-beet growers rotate beets with other crops, but prospects for replacing them with other crops are limited. When they bought Amalgamated, growers received a share for each acre of their sugar beets. If they don't plant sugar beets, they pay a penalty of $375 per share. And surplus production has depressed markets for almost all of the alternative crops.

"I can't plant as many spuds as I'd like because of the way the potato market is," Corder said. "I could grow 400 more acres of wheat, but I'd be selling it for less than what my grandfather sold it for in 1929. There isn't any good alternative."

Some see bright spots in the sugar-beet market. Mexico's new president has stopped subsidizing the sugar industry there, and sugar imports from Mexico have temporarily been halted in a NAFTA dispute. Low yields in the South, a drought in Australia and a blight in South America have lowered cane production there. And at the Amalgamated plant in Nampa, recent innovations hold promise.

The company recently shipped 80,000 tons of beet pulp to Japan for cattle feed. It's selling a sugar-beet byproduct used as an antibiotic for poultry in the Carolinas and as a feeding enhancement for salmon in Finland. The company's research branch has developed a process for extracting more sugar from beet molasses and is selling it to other companies.

"We're ahead of the game," says James Kusterer, an assistant superintendent at the Nampa plant. "We're not just making sugar anymore."

But for some farmers, the future may be too late.

"Those things would mean a brighter future," Corder said. "Maybe we'd be able to pay off our debts and keep going. But my personal opinion is that there won't be a future for the domestic sugar industry. I think the last company left standing will be all right. But I won't be a part of it."

While Corder tries to sell his sugar-beet shares, Eggers is patching up 30-year-old tractors and farming on his equity.

"The bank attaches your equity in hard times in case farming doesn't work out," he said. "You don't want to do that. Your equity is your retirement."

Eggers is luckier than some. He lives in booming Ada County, where the economy is strong and land is valuable. In time, he could sell his ground to a developer. In less prosperous rural counties, few farmers have that option. Some are reluctantly considering Idaho Power's plan to dry up the fields.

"If we sell power instead of sugar, these little sugar towns like Paul and Rupert will dry up," said Rupert farmer Terry Miller. "The people of Idaho need to understand what would happen to the rest of agriculture if we lose the beet industry. We've lost timber and mining. We can't afford to lose agriculture, too."

University of Idaho's Sugar-beets

Idaho Department of Agriculture