The California Beet Growers Association contract committee recently met with Spreckels and Imperial Sugar Company representatives to discuss rising natural gas costs and the possibility of shutting down the Mendota processing plant in Southern California. Spreckels lost about $11 million dollars last fall on three plants in California.
Company officials told committee members their bankers would not allow them to continue operating the Mendota factory at a loss. They explained growers must help compensate for increasing energy costs. After several proposals, both the growers and Spreckels agreed on a compensation range starting with $1 per ton of beets when energy costs reach $5 per MMBTU to $3.13 per ton at $7.50 per MMBTU or above.
So far, Spreckels is confident it will contract at least 8,000 acres this year, the minimum number needed for the plant to operate.
Imperial Sugar also is working with the bankruptcy court to obtain permission for growers to negotiate with the bankers to operate the plant if the company is unable to run the facility.