BOISE—Idaho’s sugarbeet industry was successful in fiscal year 2016 and is poised for more success over the next several years, according to industry leaders.
“I would (describe) our company as strong and poised,” Amalgamated Sugar Co. Chairman Duane Grant told Idaho lawmakers recently.
Amalgamated is owned and operated by the Snake River Sugar Co., a cooperative of 780 growers in Idaho, Oregon and Washington.
The company’s growers harvested 182,123 acres in fiscal 2016, up 2.4 percent from fiscal 2015, and yields reached a record company-wide. As a result, Amalgamated produced 11.6 percent more sugar in fiscal 2016 and total sales revenue is projected to increase 19.7 percent to $898 million.
The increased revenue is a result of the additional production and a modest price increase.
Grant, a Rupert area sugar beet farmer, said that the company’s board of directors and management “have made good decisions and good investments over the last five years and that has resulted in our company being poised for good success in the next half decade.”
The company has invested $150 million in its three sugar processing plants in Idaho over the last four years and “that’s resulted in our cost of operating decreasing significantly,” he said. “That sets us up well.”
Amalgamated is on track to achieve 18 percent sugar content in its beets company-wide by 2020. Sugar content is at 17.4 percent currently.
About 5,000 acres of sugarbeets didn’t get planted in Malheur County, Ore., last year because of a water shortage, but with current snow accumulation, “Odds are we’re going to get those planted this year,” Grant said. “That will be very positive for the company.”
Amalgamated has $82 million in cash reserves.
Like any business, the company has its challenges, “but we’re in a pretty good spot,” said Amalgamated CEO John McCreedy. “We’re in a strong position. If weather and market conditions stay strong, we should have another good year” in fiscal 2017.
Grant told lawmakers that the adoption of genetically engineered sugarbeets in 2008 has provided the company a major benefit. The average annual yield increase during the 16 years prior to 2008 has doubled since all of Amalgamated’s growers switched to genetically engineered beets, he said.
“We have realized a significant advantage from biotechnology in our area,” he said. The yield increases put Amalgamated on a trajectory “to be the lowest-cost sugar producer in the world as that trend continues.”
The resolution of U.S. sugar producers’ trade case claiming Mexico was dumping subsidized sugar into the domestic market also bodes well for sugarbeet growers, Grant and McCreedy said.
The two sides reached an agreement last year that will regulate the flow of Mexican sugar into the U.S.
Mexico’s sugar dumping resulted in a market unbalance that created volatility in the system, McCreedy said.
“Now we have a balanced system that will provide our Idaho, Oregon and Washington growers a level of stability they can build off of,” he said.
Source: www.capitalpress.com