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Agriculture
Dan Gunderson
Fargo, N.D.

Weather takes big bite out of sugarbeet profits

water standing on a muddy sugar beet field
Saturated soil delayed harvest for many crops this year, including sugarbeets.
Dan Gunderson | MPR News file

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It was a tale of two extremes for sugarbeet farmers attending the American Crystal Sugar Cooperative’s annual meeting in Fargo, N.D., Thursday.

The co-op reported that a strong 2018 crop generated a total of $609 million in payments to farmer shareholders, or $54.78 per ton of sugarbeets.

"But then the 2019 harvest was just a whole other story with the reduced volume, reduced sugar content, and because of that, a reduced payment per ton to our shareholders," said American Crystal president and CEO Tom Astrup.

In stark contrast to 2018, the weather-damaged 2019 crop is expected to bring a total payment of $278 million, or $37 per ton.

"The mood is glum," said Astrup. "It's a year in which everybody's going to lose money on their sugarbeet crop, and of course things aren't the best with anything else that they're raising right now, whether it's corn or soybeans or wheat or anything else."

Cold, wet weather kept many farmers in the Red River Valley of northwest Minnesota and eastern North Dakota out of fields during harvest. About 118,000 acres of sugarbeets were unharvested by the time the cold weather set in. That's nearly a third of the crop — and the smaller harvest means American Crystal Sugar’s five processing plants will likely shut down in February or March instead of operating into May as they normally do.

Because of the cooperative structure, farmers who were unable to harvest beets are required to make a payment of $343 for each acre they left in the ground. That money will help offset factory operating costs.

Astrup said the cooperative will likely need to reduce planned capital investments over the next two years, and will be unable to fulfill contracts to provide sugar to large customers.

The USDA has already indicated it will increase sugar imports from Mexico to make up for lost domestic sugar production.

American Crystal Sugar is the largest beet sugar producer in the United States.