Region has banner growing, harvest seasonsAmerican Crystal Sugar Co.’s shareholders were told recently that this year’s crop is projected to bring them average payments of $57 per ton.
By: Stephen J. Lee, Grand Forks Herald
American Crystal Sugar Co.’s shareholders were told recently that this year’s crop is projected to bring them average payments of $57 per ton.
That’s a modern record, bested only by a payment jacked up more than 30 years ago by a run-up on sugar prices in the mid-1970s in the early days of the Moorhead-based cooperative, said Jeff Schweitzer, American Crystal spokesman in Moorhead. Last year’s crop ended up bringing a payment of $52.87 a ton; only a few times have the payments gone north of $50; historically they have been nearer $45.
But it gets better.
The high payment will join a record yield of beets this year, an average of 26.3 tons per acre for the 415,000 acres harvested. Which means a record gross revenue for the Moorhead-based co-op’s 2,768 shareholders - which include the 825 “farm-units” who do the actual planting and harvesting - of $1,500 per acre.
That means the average shareholder's harvested acreage of 150 acres will gross $225,000. The total payments for this season’s beets would add up to $622 million in gross crop revenue to the co-op’s shareholders.
It's important to remember that the estimated payment can change; by the time all the beets get processed into sugar by late May, sugar prices or American Crystal's expenses could change. The final payment decisions for each crop year are made the following fall.
But as the 2010 harvest for all crops has wrapped up, the sugar beet example is just part of a mosaic of remarkable farm success this year in the region, as a great growing season and a near-perfect harvest made for high yields poised to take advantage of high prices.
“Just now, looking at the profitability of individual crops . . . with these prices, it’s going to be a very profitable year,” said Andy Swenson, an ag economist at North Dakota State University who tracks farm income in the state.
All but 5 percent of the corn was combined by Sunday in North Dakota, and only 12 percent of the sunflowers remained, according to the U.S. Department of Agriculture’s weekly survey.
A year ago, 93 percent of the corn — bunched in the wet, eastern part of the state — remained to be harvested by Nov. 14, and 44 percent of the sunflowers, found mostly in the higher and drier central swath of the state, still were in the field.
In Minnesota, just 3 percent of the corn was left by Sunday, compared with 60 percent a year ago and 18 percent on average.
And this year the crop was a stunner, in whatever field.
In its latest estimates, USDA pegged North Dakota’s corn yields at a record 137 bushels an acre, down from earlier projections of 140 bushels, but well above the previous record of 129 bushels.
Meanwhile, Minnesota corn growers lead the nation in yield this year with 175 bushels per acre, one bushel more than last year.
Wheat yields are near the record highs of last year in North Dakota of 44 bushels per acre.
Cost of wheat production in the Red River Valley fell a little this year, mostly because of lower fertilizer prices, to about $290 per acre, figuring average cash rent for land, Swenson said. With most yields in the Valley going over 50 bushels, that means many farmers could net $50 or more per acre on wheat at prices of $6.88 a bushel, on average, at area elevators Monday, according to an Agweek survey.
Soybean yields, at 36 bushels an acre in North Dakota, are near the record of 36.5 bushels; Minnesota farmers grew a record soybean crop this year. Soybean prices have been flirting with $12 a bushel, 30 percent higher than normal.
Sunflower yields in North Dakota will hit a record of about 1,680 pounds per acre, according to the National Sunflower Association. Prices remain high, at $20.50 per hundredweight at the oil crushing plant in West Fargo, N.D.
It's all part of a year when the weather was great for not only the cool-weather-liking small grains, but also for the row crops such as corn and soybeans which thrive on more moisture, sun and heat, Swenson said.
The result has been record or near-record yields in major crops.
At the same time, worldwide demand for food and bad growing conditions in some countries such as Russia and Brazil, have pushed prices high.
So sugar prices are at 30-year-highs, which, while only indirectly, do affect what sugar beet growers get in returns.
Wheat prices are near $7 a bushel at area grain elevators, near the all-time high average prices.
Corn prices slipped a little in recent days, but remain at high levels, averaging $4.67 a bushel at area grain elevators Monday, according to an Agweek survey. That’s 30 percent to 40 percent higher than long-term price averages.
Swenson said the increasing yields and high prices levels have led to an interesting growth in North Dakota farms. The average size of North Dakota farms has doubled in the past four to five years, not in acreage, but in gross revenue, he said. So, a 1,500-acre farm now produces $500,000 in crop revenue, instead of $250,000. Part of the change includes more spending in fertilizer, equipment, and land costs, he said.
Swenson said every farmer is handling more money, in terms of both revenue and expenses, meaning there is more at risk. “It makes it a little more challenging,” he said.