American Crystal Growers Take Pay Cut

Published online: Nov 21, 2019 News Ann Bailey
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Source: AgWeek

American Crystal Sugar Co. told its shareholders this week that they will receive $37 per ton for the 2019 sugarbeet crop.

That’s about $14 per ton, or 28 percent, less than last year’s payment. The announcement was made at the company’s fall factory district meetings held in Drayton, N.D., and Crookston, Minn., on Nov. 19, and in East Grand Forks, Minn., and Hillsboro, N.D., on Nov. 20. The factory district meeting in Moorhead, Minn., will be Thursday, Nov. 21 .

About 2,800 Red River Valley farmers grow sugarbeets for American Crystal Sugar. In 2018, farmers who grow sugarbeets for the company produced 11.1 million tons. The 2018 sugarbeet payment to the producers was slightly more than $51 per ton.

American Crystal Sugar Co. spokesman Jeff Schweitzer on Wednesday declined to disclose the amount of the 2019 sugar beet payment, saying the company has a responsibility to talk to its shareholders before it speaks with the media. The Moorhead factory district meeting had not yet been held when he was contacted.

However, sources who attended factory district meetings confirmed that $37 per ton is this year's payout.

This year’s payment is lower than last year's because farmers had to leave approximately 3.5 million tons of their crop in the field this fall. It means only 66 percent of the crop was harvested.

Heavy rain in September and October saturated fields, making them too muddy to harvest. Then, unseasonably cold temperatures in early November froze the sugar beets, rendering them unsuitable for processing.

The harvest situation American Crystal faced this fall was unprecedented in the cooperative’s history, according to East Grand Forks farmer Matthew Krueger. Farmers are shareholders with the company, and thus required to provide predetermined quotas to the factories; this year, with the reduced harvest, the company is requiring its farmers to pay back $343 per unharvested acre.

Krueger believes the American Crystal management team handled the situation the best it could under the circumstances, and he understands why the company has directed its growers to make the payments.

Krueger had to leave about 60 percent of his crop – or 424 of his 682 sugarbeet acres – in the field this fall. Krueger, who raises the crop with his father Kevin and brother Ben, believes it’s fair that farmers have to pay back the company for the unharvested acres. American Crystal needs the money to keep the cooperative viable, he said.

Matthew Krueger lost 60 percent of the sugarbeets he raised this year near East Grand Forks, Minn., with his father and brother to wet conditions and freezing temperatures. Photo by Ann Bailey/Grand Forks Herald