The contract with the Tobacco Workers and Grain Millers Union covers 1,500 employees at the farmer-owned co-op's five beet factories and distribution centers in Chaska, Minn., and Mason City, Iowa.

Union locals ratified the contract in local votes. Without the extension, the contract would have expired July 31, 2002. The extension provides a 2 percent wage increase Aug. 1, 2002, and another 2 percent increase Aug. 1, 2003.

The co-op's sugar distribution centers are operated by United Sugars Corp., the Minneapolis-based marketing subsidiary owned by Crystal and three partners. United Sugars partners are Minn-Dak Farmers Cooperative of Wahpeton, N.D., Southern Minnesota Beet Sugar Cooperative of Renville, Minn.; and U.S. Sugar Corp. of Clewiston, Fla.

For Crystal's contract, both labor and management described a "constructive attitude" in making the extension.

"In light of the current financial stress in the sugar industry, along with discussions concerning international trade agreements and a new farm bill, this was an opportune time for both parties to extend the current contract rather than return to the negotiating table next spring," says James Horvath, president and chief executive officer.

Dan Gust, the union international representative, says the contract negotiating committee "felt this extension continued to move the contract forward, benefiting the (union) members. It also provides a stable labor force and the necessary time element for American Crystal and the industry to appropriately address the domestic and international sugar issues that will define our future."