The agreement, announced Thursday, is for the co-op to purchase all of the stock of Western Sugar from Tate & Lyle North American Sugars. The pact is contingent on finalizing of financing.

To complete the individual appraisals and financing, the final closing was extended to July 31. A spokesman for the Rocky Mountain Sugar Growers Cooperative said he saluted Tate & Lyle for recognizing the need to negotiate the value based on production. The sale price was reduced from $78 million to $48 million.

Tate & Lyle PLC of London is the largest sweetener company in the world. It bought the Great Western Sugar Co. in 1985, which was in bankruptcy at the time. Western has operated the six refineries since. Tate and Lyle, suffering revenue setbacks in the past year and a half and a loss of stock value, began divesting itself of overseas properties in Australia, Zambia and the United States.

The co-op board of directors in a Thursday letter to growers outlined the new proposal. The sale was put on hold May 16 when the board announced it was negotiating for a lower price based on final acreage committed to the purchase.

The board wrote: Since that time, we have been engaged in extensive discussions with Tate & Lyle as to how the purchase could be structured to work with approximately 127,000 acres, which we believe we can count on. The higher acreage earlier projected was based on higher projections from growers who would grow under the Western Sugar contract but then who did not grow.

Rick Dorn, chairman of the co-op board, said Thursday afternoon, Those are 127,000 acres going to harvest. The price is a value based on that production. That is a better deal for the grower out in the field.

I salute Tate & Lyle for recognizing the need for negotiation, Dorn said. Dorn lives in Billings, and raises sugar beets near Hardin.

The letter continued: Closing is now scheduled for July 31, but is contingent upon funding. We have reworked our financial model at the lower acreage, We project profits during the first two years of operations at $5.4 and $10.4 million while paying an average beet payment of $33.35 and $34.15 per ton. We know that at this price and level of debt the company can operate successfully.

We have also been exploring relationships which will increase our profits, drive costs out of our operations, reduce freight, add value to our marketing and provide more throughput for the factories. This delay in closing will save additional interest for the Cooperative and for growers who borrow their investment.

Last year, Tate & Lyle offered Western Sugar Co. to its 1,100 growers for $78 million or half of its estimated liquidation value. In early February, sugar beet farmers in four states subscribed 150,000 acres to the growers cooperative to buy Western. The 1,100 farmers committed themselves to invest $185 per acre of beets.

However, this spring about 130,000 acres were planted. Growers in Montana and Wyoming were strong supporters in subscribing acres, but those in Colorado and Nebraska lagged.

Dorn said that there is a mechanism for growers who did not commit acres this year to buy into the plan. We will be looking to increase acreage to more historic levels, he said. The market place will reflect that. Acres are down all over now.

A small improvement in the market place would give a significant boost for the (new) company, Dorn said.

The sugar industry in the United States is in a bind. Last year, because of national and world over supply, producers forfeited large amounts of sugar to the U.S. Department of Agriculture. The forfeitures cost taxpayers hundreds of millions of dollars. Recently USDA announced it was selling 150,000 tons of that sugar for ethanol production.

The sale was delayed March 31 by incomplete financial arrangements. At that time, the two parties extended the closing date to June 30. The delay in closing was attributed to delays in obtaining bank funding because of delays in obtaining individual appraisals. The board then encouraged all growers to plant on their regular schedule. Planting normally begins around April 15. The latest crop report, issued Monday, indicates the sugar beet crop has emerged on schedule.