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Outlook grim for beet farmers
By Larry Meyer, The Argus Observer
July 20, 2001
 
The sugar industry continues to face a bumpy road as producers try to navigate between poor growing conditions, low prices and the dilemma between too much, and not enough, water.

While the recent power buyout by Idaho Power is seen by some as a solid measure in the effort to save energy, the ripple effect of the policy on area beet farmers is already being felt.

According to Gilbert Wells, agriculture manager for Amalgamated Sugar Co., in Nyssa, there were more than 14,000 fewer acres of sugar beets planted this year by his company. More than 2,000 of those acres are in the Nyssa district.

Most of that was due to the power buyout, Wells said.

Wells also said there are other economic factors that come into play as well.

Some growers were not able to get financed, he said. Other farmers, Wells said, have also downsized their operations.

The 1997 buyout of Amalgamated Sugar Company by Snake River Sugar Company a grower cooperative also comes into play this year.

A farmer in the cooperative is required to plant the number of acres equal to the number of shares he owns in the company.

They are obligated to raise that many acres of beets or transfer them for someone else, Wells said.

If the beets are not grown, the growers who own the shares can be charged $278 for every acre not grown, Wells said, and the farmer could forfeit his rights to grow beets for the company.

Growers have until this fall to complete their payments, he said. Until this year we hadnt had to deal with that. Wells also said that in the past, beet acreages were placed out on the market and other farmers could lease them.

Now, however, he said, with more growers retiring and periodic downsizing, more beet acreages are on the market than can be used. Some growers, Wells said, were paying other farmers to grow their beets.

Then came the power buyout.

That just killed the market, he said. This power buyout has interrupted the natural transfer of shares. Its going to have an effect,

About 3,700 acres of beets had to be replanted earlier this spring because of wind and frost damage, Well said. Then came the root maggot.

Officials have found no real answer for the pest population, but Wells said one theory currently being tossed around is that the infestation was brought on when beets were plowed under last year as part of the payment-in-kind program where growers were paid not to harvest their beets.

The growers have had it tough, Well said.

Low sugar prices and increased costs have also hit local beet farmers hard. The purchase of Amalgamated Sugar also hit hard.

It put them (farmers) in a pinch, Well said.

With the debt load if the companys revenue from its products is not high enough, money is held back from the growers payments on their beets to make payments on the loan. We need the market price (of sugar) to go up, he said. They cant continue to absorb the costs.

Wells said there is a lot of pressure right now to import more foreign sugar because it is cheaper, but the imports are why prices are already poor.

We need to control imports, he said.

The 1991 and 2000 crops were the best crops we ever high yields, highest sugars, Wells said, but growers got poor returns.

It just shows you what prices can do even when you have an excellent crop.