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Contracting for the 2001 sugar beet crop is right on schedule,
according to Rick Griffith, agricultural manager for Holly Sugar
Company.
"Agriculturalists are still out contracting," he said.
"Growers are starting to finalize their plans for this coming
year, so we're starting to see more contracts every day."
Holly plans to have the majority of its contracting completed
through April.
Given the right spring conditions, some growers may begin planting
in late March, and the majority will plant around April 10, Griffith
said.
"We feel we have the best contract in the industry,"
Griffith said. "In addition to our contract, we also have our
bonus program. Growers receive on top of their regular beet payment
bonus money which amounts to $1 per ton. We still have the freight
incentives, which means those growers that are outside 10 miles of a
receiving station receive 8 cents per ton mile to get them to a
receiving station."
Regarding the sugar market, reports from Doug Ehrenkranz, executive
vice president of sales and marketing at Imperial Sugar Company, state
that sugar prices have bottomed out. Presently Chicago sugar prices
are at $27 and above on the spot market, according to Leroy Schafer,
district manager at the Holly factory.
"We are optimistic about this," Griffith said. "The
2001 crop sugar prices are on the rise, which means more dollars to
the ton for the grower."
Imperial filed Chapter 11 bankruptcy in January. The majority of
prefiled bills are still hung up by Chapter 11, but most of them will
be finalized on May 2, Schafer said.
All post petition bills are paid or current after Jan. 16.
"We've been working diligently here at the local level to work
with our local venders that were caught in the pre-petition filing to
get them current on pre-petition claims," said Kelvin Thompsen,
Holly director of agriculture. "I think we've had great success
on that, and we'll continue to do so until we get it current."
Last week the company sold the nutritional branch of Diamond
Crystal to Hormel Foods for $65 million. "This was just a brand
of nutritional products," Schafer said. "It has no facility
and people involved. We will use $50 million of that sale to pay down
Imperial's debt. This payment, along with the Chapter 11 debt equity
swap for the bondholders, will reduce Imperial's debt to $200 million.
"It's important to know that Imperial is a much stronger
company financially through the bankruptcy and the sale of the
nutritional segment of Diamond Crystal," Schafer added.
Imperial plans to sell property of two facilities in Tracy and
Woodland, Calif., which closed its doors in December. The money will
be used to reduce Imperial's debt, Schafer said.
Holly's Torrington factory has been in existence since 1926.
"We'll be celebrating our 75th anniversary this summer,"
Griffith said. "We've been a large part of this community over
that time."
Currently, Holly employs 130 people year round, Griffith said.
During campaign, the seasonal work force increases to approximately
400 people, which represents an annual expenditure for employee wages
to be $4.8 million a year.
Annual beet payments to sugar beet growers will amount to about $16
million this year, and an estimated $1.5 million will go to suppliers
within Goshen County.
"Basically, we generate a lot of money," Griffith said.
"Our intentions are to run this facility. We enjoy being a part
of the community, and we plan to stay here."
"On behalf of Holly, I want to express our appreciation for
the patience and support of the local people and local venders as we
get through this Chapter 11 period," Thompsen added. "As a
result of all the local support, Holly is going to be a much stronger
company when we emerge from this, and we look forward to being a
viable contributor to the local economy as we have for the last 75
years." |