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Weather, other factors bring balance to sugarbeet market

By Andrea Johnson ,  Farm & Ranch Guide
December 28, 2001
 
FARGO, N.D. - The 2001 growing season will be remembered for difficult weather conditions that hurt sugarbeets, an oversupply of sugar that hurt prices, and a terrorist attack that hurt the nation.

Through it all, sugarbeet growers in the Red River Valley did their best to raise high quality beets while their cooperatives worked to maximize profits.

Spring tillage and planting for 2001 began later than last year and the five-year average due to cool temperatures and wet conditions in April throughout the Red River Valley. The first beets were planted in mid-April, but excess moisture hindered planting so that the majority of beets were planted toward the end of May and into early June.

A dry period followed during critical growing weeks in July and August. When rains returned, they remained intermittent throughout the season, decreasing yield potential.

Minn-Dak Farmers Cooperative harvested about 94,235 acres and delivered 1.7 million tons of sugarbeets with an average yield of 18.04 tons/acre this fall.

David Roche, president and chief executive officer announced that average sugar content was 17.46 percent, as compared to 18.5 percent for the 2000 crop.

"Both yield and sugar content are below the long-term average although purity is comparable and the crop is storing well thus far," said Roche at a press conference on Dec. 4 in Fargo.

This will be the shortest campaign in a number of years, said Roche, projecting a 164-day slicing campaign, which is "not a part of the standard business plan."

"While price outlook is improving, the reduced crop will mean a reduced average return per acre," said Roche. "Growers understand that a reduced crop translates to lower returns."

For fiscal year 2001 (2000 crop) the cooperative's revenues increased by 5 percent from $170.1 million to $177.9 million, with the growers' share totaling $89.6 million.

American Crystal Sugar Company growers harvested about 8 million tons of sugarbeets averaging 17.8 tons/acre - over two tons/acre less than in the co-op's recent history. Average sugar content was 18 percent - about one-half percentage point better than recent norms.

American Crystal projected an average gross ton payment for this year's crop at $36/ton, or $641/acre - about $5/ton below the coop's 10-year average. The gross beet payment for 2000 totaled $37.70/ton. For an average shareholder, that equaled about $821/acre.

Nearly $100 million will not come into the Red River Valley's economy that would have in a typical year because of the lower yields and payments, said James Horvath, American Crystal president and chief executive officer.

American Crystal's 2000 crop was the third largest in history at just over 9.6 million tons. The sugar content was slightly above average at 17.8 percent. The coop produced about 1.45 million tons of sugar. They also received 75,000 tons of sugar in exchange for not harvesting about 33,000 acres of sugarbeets. Total shipments were about 15 percent of all the sugar consumed in the United States.

For a second year in a row, sugarbeet growers participated in 2001 in the Payment-In-Kind program conducted by the Commodity Credit Corporation. American Crystal growers did not harvest about 29,000 acres as part of the PIK program. Minn-Dak growers were authorized to plow under 9,881 acres this year.

The PIK program reduced government stocks of sugar by about 500,000 tons, or about 50 percent, said Horvath. In addition, because of extremely low prices of sugar as well as weather conditions, sugarbeet acreage throughout the United States was reduced by about 10 percent, or 150,000 acres in 2001.

"All these factors brought balance back to the sugar market for this year," said Horvath.