The question remains: Will enough of today's growers take the risk of investing in the newly-formed sugar beet cooperative that the local industry and employer can be saved?

Company officials and co-op board members hope that answer is yes.

At 102 years old, the Caro plant is the oldest operating sugar beet processing factory in the nation. The name Michigan Sugar was created in 1906. Since its creation, the business has pumped untold millions of dollars annually into the economy of Tuscola County and the greater Thumb and Saginaw Valley.

The push to turn former beet growers into full-fledged cooperative members with voting rights is well underway. Area resident and growers' board president Wayne Hecht spoke to about 60 area growers, land owners and members of the financial industry during one such meeting at the Brentwood in Caro.

"This opportunity to take ownership was first offered to us a year ago January," Hecht said. "A great weight of responsibility fell upon us. But never during this time has anyone on the board expressed to us that they wanted out.

"It sounds rather lofty, but it's really true - this is an opportunity for us to take control of our destiny. And to do that, we need to start thinking in a true cooperative sense, to save this industry in our community and in our state."

Utah Attorney Randon Wilson, who the cooperative has hired to organize and help see-through the transition of taking the commercial business into a cooperative structure, was on hand to present the financial details of the deal and answer audience questions.

Wilson has been involved with similar cooperative ventures involving the Snake River Growers Cooperative in Idaho, and also the Rocky Mountain Sugar Beet Cooperative.

All of the financial information and models were created by the local cooperative board and the attorney.

Wilson said he grew up on a farm that grew beets, and understands both the pressures in the agricultural industry as a whole, as well as those directly involving sugar beet growing.

"This industry has the kind of stability that farmers only dream about in other crops and commodities," he said. "There is nothing 'start-up', speculative or New Age about this venture - this would be taking control of a well-known, successful company whose markets and financial model is known.

"Essentially, we must have both the money and acreage come together, so that the cooperative is not over-burdened, and so that we ensure the product is there," he said. "If we can do that, we will be the least burdened sugar company in the nation."

About 1.5 million acres of sugar beets is planted annually. "That's an amount that is too much for other crops to take over, and too much production to ignore. If we tend to our knitting at home, we'll be the last one standing, even if the industry falls."

As a cooperative, the business would have a single-tax structure, without corporate income tax at the state or federal level; would be able to join forces with other cooperatives to cross-market products without fear of anti-trust market violations, and also have a securities exemption status which would mean the business could raise money per acre without needing the offering to be approved by the Security and Exchange Commission.

"When this is done, all but two of the sugar beet factories in America will be operating and cooperatives," he added.

The factories in Caro, Carrollton, Croswell and Sebewaing had a combined slicing capacity of 16,000 tons per day. He said their factories are well maintained and have a good amount of storage available, with 3,181,000 hundredweight (cwt.) on hand - about three-fifths of its total annual product.

Acquisitions The terms of the buy-out call for $55 million cash, plus another $10 million in subordinated debt. That $10 million, he said, would be paid over time, after meeting the debts of any others.

The agreement would involve Imperial Sugar continuing to market Michigan Sugar's product for the next 10 years.

"The good news is that Imperial is a good marketer," he said. "The bad news is that we might have been able to do a little better and cheaper, but we would have to be able to fight our way into the market - and that's a tough order."

The $55 million in cash involves $20 million in grower equity.

Using those figures, it's estimated that to join the cooperative it would cost farmers a one-time charge of $100 for member voting stock, plus $200 per acre grown. The $100 for voting stock can be made in two payments, with the first being postmarked by June 15, and the second by no later than August 1.

The cooperative would be a corporation, and as with all corporations, the members would not be liable for the debts of the corporation.

Wilson said he knows the past several years have been financially hard for most of America's growers. He added that if a farmer's private bank or lending institution would not approve loans for a grower to join the cooperative, that the grower should specifically ask for a FSA guarantee loan. "Some banks may not automatically offer it as an option, but they must respond to your request for it," he added.

For those growers who are turned down by lending institutions and truly have no other means of financing, a Grower Finance Pool is being created within the cooperative. Growers who can prove they have been denied loans at other institutions can apply to receive a private loan from this account, which is being funded by a number of private interested individuals and companies.

"Ideally, this will be just a three-year pool," he explained. "The grower will re-pay the loan from deductions from his beet check. Three years should allow enough time for him to get his feet back under him and then go to a bank for further financing."

If a grower defaults, the cooperative structure will allow him to re-sell his shares and the acreage would be divided up.

In the event that the cooperative does not come into being due to lack of acreage or interested growers, all growers who had invested their money into the cooperative would receive "every penny back," Wilson added.

The cooperative will have four different kinds of stock:

*Common Stock - This is the $100 voting stock.

*Patron Preferred Stock - This is acreage stock with delivering rights and responsibilities. These are tradable

*Patronage Retained Earnings - This is stock that is reflective of the profits of the cooperative, and can be redeemed over time.

*Unit Retain Certificate - This cost is to never be higher than $2, and is to be used for emergency purposes only.

If all of the cooperative's acreage stock sells, he said, and there is demand from outside growers, the stock holders will be able to re-sell their stocks as they wish at a price they set. By doing this, the value of the overall stock often increases and also becomes self-regulating.

The key to making the new cooperative successful is its ability to contract enough acreage. An average annual campaign usually involves contracting for about 124,000 acres.

The growers association hopes to finalize the purchase by September, or at the latest, February. An environmental assessment of the properties is yet to be done.

For more information or a complete packet of acquisition details, call the Great Lakes Sugar Beet Growers office in Saginaw at 989-792-1531.