President and CEO Kurt Wickstrom addressed the co-op’s annual meeting in Fargo on Tuesday, Dec. 4, and remained upbeat after equipment failures and weather challenges that have translated into disappointing 2018 beet prices.
Wickstrom declined to discuss what the company’s first annual beet payment projection is this year. About a third of the 2018 crop had emergence and frost problems, Wickstrom said. The growing season improved, but growers suffered their second-worst year of cercospora leaf disease despite diligent fungicide applications.
August crop samples indicated a 30-ton-per-acre yield and nice sugar content. “When all was said and done and the crop was delivered, the yield was just under 27 tons, which is still a good yield,” but the sugar content of 16.45 percent was over a percentage point less than the earlier samples.
The co-op reduced acreage in 2018 to 88,000 from the previous year’s 97,000 acres, Wickstrom said. A diffuser — a key factory component — broke down during the processing season. Because of that and other delays, the co-op processed 2017 beets until a record-late July 5, 2018. They needed to cut acres to allow for a vital summer maintenance schedule, and right-size the crop for an anticipated shorter processing season.
“We’re going to slice 350,000 to 400,000 fewer tons than last year and we’re dependent on that volume to produce a good grower payment,” Wickstrom said. “So our grower payment is not going to be what we’d hoped it was going to be.”
For 2019, the co-op is planning to go back to 101,000 acres, knowing they need volume.
Wickstrom said the company needs to make managed, planned, reasonable-sized investments in the facility; increase acres to fit a 260- to 270-day processing campaign; and increase sugar content and recoverable sugar per ton.
Luther Markwart, executive vice president of the American Sugarbeet Growers Association, covered the waterfront of national and international political conditions.
Markwart said all the pieces are put together for the farm bill, but declined to comment on specifics until it is passed and signed by President Donald Trump, which could happen in the coming weeks. The death of former President George H.W. Bush created a week’s delay.
Mexican sugar export problems of a few years ago have been “fixed and are working quite well,” Markwart said.
The United States-Mexico-Canada Agreement, which replaced NAFTA, appears acceptable.
Markwart said the administration is being very aggressive with one-on-one trading agreements with countries. The industry will be vigilant, paying special attention to any European Union agreement.
“Agriculture will be very tough with the Europeans, but in terms of sugar, they are now an exporter,” he said. “We’re an importer, and they export refined sugar. We don’t need any more refined sugar in this market because that threatens our U.S. cane refiners and puts pressure on beet sugar in the market. We don’t want that and we don’t need it.”