| Contrary to expectation, growers in the Sidney factory area had beet
acres accepted for the Payment in Kind (PIK) program this year. Because of
the decrease in the total number of acres eligible for acceptance this
year, as well as changes within the program itself, area growers held out
little hope of having their bids accepted. However, on Sept. 28, the USDA
awarded PIK acres to all growers who placed bids of less than 87.99%, a
percentage that included area growers. The PIK program this year
included 200,000 tons of beets, said Terry Cayko, president of the
Montana Dakota Beet Growers Association. The total tons bid this year
from the beet and cane sector came to 237,000 tons, so the top 37,000 tons
never made the program. Growers had to bid 87.9931% or less to make this
years program.
He adds, Each grower had his own individual average in tons and
sugar, and any grower interested in applying for PIK acres had to take
this average and bid a percentage of what hed normally be eligible to
receive. The grower in essence tried to make a bid of what the actual crop
was worth in the field.
Area growers expected growers in the Red River Valley to put in for
more PIK acres this year. However, that didnt happen. We thought the
Red River Valley growers would put in for more, but they didnt,
Cayko remarked. The feeling was that we in this area wouldnt get
acceptance this year.
Cayko could not say with any certainty at press time the total number
of growers in the Sidney factory area who received PIK acres this year. He
could say, however, that area growers did qualify. I just know that
some growers did get PIK acres, he commented. Id say that likely
the vast majority of them were accepted.
He added, When growers applied, they received their rating, so every
grower knows right now if he made the program or not, because we know that
anyone who bid less than 87.9931% got accepted.
The PIK program, put in place last year to reduce the sugar surplus on
the market, underwent changes from last years program to this years
program. Last year, the PIK program accepted 300,000 tons of beets for the
program from growers all across the country. This year, program rules
dropped the tonnage limit to 200,000 tons of beets, and as well, required
growers to bid their crop. Last year there were 300,000 tons of beets
that could have been taken out for this program, Cayko said. This
year, only 200,000 tons were put out for bid.
He adds, The Sidney factory area alone produces between 800,000 to
1,000,000 tons of beets a year, so 200,000 tons of beets isnt very much
in the scheme of things.
Growers also had an individual cash limit of $20,000 with this program.
This cash limit determined the number of acres a grower bid for the
program. With a $20,000 cash limit per grower, no one could bid their
whole crop, Cayko remarked. Most growers could only bid on less than
20 acres, and for many growers, this is less than 10% of their entire
crop.
With 200,000 tons of beets out of the picture, sugar prices should
stabilize. Cayko believes that this years program will take care of
last years forfeited sugar and will pave the way for better sugar
prices. This is a good thing, he observed. It will take down the
Commercial Credit Corporation sugar under loan and this will be dispersed
to the producers. Hopefully, with the oversupply cut, the price of sugar
will start to rise.
He adds, Hopefully this is the last year for PIK. I dont expect
to see it after this year. If we need another PIK program, it means we
still have too much sugar, and I dont see that to be the case by next
year. |