Published November 05 2013
Forum editorial: It’s perfect storm for US sugarLet’s put to rest the self-serving nonsense that the steep decline in American Crystal sugar payments is a result of the labor conflict that resulted in a long lockout of union workers. No one can make an honest, cogent, fact-based argument that the lockout caused or even modestly influenced the sugar-choked global market and/or growing conditions that are the real causes of lower payments to producers.
Just a few weeks ago, the company announced it would access the federal sugar program (one of the few times in company history) in order to help stabilize its financial picture. That move was precipitated in part by an influx of foreign sugar, mostly from Mexico, that has depressed the market for producers in the Red River Valley of North Dakota and Minnesota, and in other U.S. sugar-producing states.
Throw in a season that has seen poor harvest yields and low beet sugar content, and it’s been a kind of perfect storm for the company and its cooperative member growers. And as if to further put the lie to the lockout factor, MinnDak Farmer’s Cooperative of Wahpeton, N.D., expects its grower payments to fall to the range of $40 per ton, which is in line with Crystal’s announced $38 per ton. There was no labor lockout at MinnDak, and the cooperative has been forecasting a $40 payment for months.
The reality is this: The same factors affecting Crystal and its growers are affecting MinnDak and its growers. The changes in the global sugar market, in particular imports of Mexican sugar into the U.S., will have a detrimental impact on U.S. producers, and subsequently on the local and regional economies that depend on healthy sugar growing and processing industries.
It’s not a union labor issue. It’s a combination of poorly thought out public policy and Mother Nature’s mean streak.
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