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Mikkel Pates, Forum News Service, Published September 03 2013

Pre-pile beet harvest starts

MOORHEAD – Amid a poor sugar price climate and with a 22-month labor lockout ended, American Crystal Sugar Co. started its pre-pile sugar beet harvest Tuesday.

Dan Gowan, American Crystal’s director of agriculture in Moorhead, said the pre-pile harvest is later than last year because the crop is smaller, and keeping beets in the ground allows them to grow.

The crop had a “late start, but it looks like we’re going to have a very nice finish, and not too far from an average crop,” he said.

This year’s crop is projected at 22 tons per acre. The 2012 crop averaged 27.1 tons per acre, and the averages in the past few years have been slightly more than 24 tons per acre.

Late planting and a cool spring slowed the crop, and the recent lack of moisture had an effect. Indications of sugar content are excellent for this time of year, according to the company.

Rains like those that came to portions of the Red River Valley in North Dakota and Minnesota on Aug. 29 should help the yield, said Cory Kritzberger, American Crystal’s former ag director. He recently became harvest and maintenance supervisor for the East Grand Forks, Minn., factory.

Gowan said the full-scale harvest is tentatively set for Oct. 1.

This year’s crop will be harvested in an environment of poorer economics for sugar than farmers have seen in the past several years.

One of the significant issues in declining sugar prices has been larger-than-expected Mexican production, which can come to the U.S. freely because of the North American Free Trade Agreement. Other world sugar imports are restricted through a tariff rate quota.

David Berg, American Crystal’s president and CEO, said Mexican soft-drink manufacturers plan to buy 50 percent more Mexican sugar for their products this year. Some prominent soft drink bottlers in that country are owned by sugar companies.

While the soft drink industry announced it will buy more Mexican sugar, the Mexican government clarified it had nothing to do with the announcement and would continue to take advantage of the Free Trade Agreement.

The 2013 to 2014 Mexican sugar crop isn’t likely to be as large as the 2012 to 2013 crop, but is likely to be “way more than we can use,” Berg said.

The U.S. typically can handle about 700,000 tons of Mexican sugar imports, but under the North American Free Trade Agreement, must take all that Mexico decides to send. If the shift of Mexican sugar into soft drinks occurs, Berg said a quarter of the sugar that might have been coming to the U.S. might stay at home.

“That doesn’t fix things, but it’s a step,” Berg said. “It’s (the market implications) 2,000 miles and 12 months away, so we’ll see what the actual impact is.”

Berg expects no major change in American Crystal’s sugar production from the return of the Bakery, Confectionery, Tobacco Workers and Grain Millers union members, who came back to work May 28 after a 22-month lockout.

Farmers and other industry officials are watching to see if a change in beet prices will affect beet cooperative share prices. American Crystal’s beet payment was $63 per ton for the 2012 crop and the current projection for the 2013 crop is $40 to $45, according to a letter sent to shareholders.

Farther south in the Red River Valley, Minn-Dak Farmers Cooperative in Wahpeton, N.D., will start its pre-pile harvest on Sept. 11, which is nearly a month later than last year’s Aug. 14 start, said Tom Knudsen, vice president of agriculture. The co-op projects a 19.2-ton-per-acre crop.

Knudsen said beets are feeling the effects of hot and recently dry conditions, with some in isolated areas going “as flat as a pancake” in the midday sun, especially in sandier areas of the south.

“Some growers haven’t seen it like this since 1988 or 1989, and some haven’t ever seen it,” Knudsen says. Quality samples look good.

Sales of stock for Minn-Dak Farmers Cooperative and Southern Minnesota Beet Sugar Cooperative are done through private treaty deals, not through brokers.