Minn-Dak Farmers Co-op to miss beet slice schedule by a month
WAHPETON, N.D. — Minn-Dak Farmers Cooperative was supposed to have been done slicing sugar beets June 5, but is expected to continue through the end of the month — perhaps into July.
That's due to a large 2017 crop and an expensive equipment breakdown in March.
"Here we sit. It's June 5 and we're still slicing beets," says Kurt Wickstrom, Minn-Dak president and CEO. "I think we have 240,000 tons to slice."
The company typically tries to size the storage piles for a May 20 end-date. The board projected the longer campaign based on a 9,700-ton-per-day slice to accommodate a 30.5-ton per-acre crop.
Things were going fine until the company's diffusion tower broke down in mid-March, interrupting processing for about 13 days. That was followed by the third-warmest May on record.
A diffusion tower is a key component of the factory that extracts about 85 percent of the sugar and there is only one per factory — no backup. Beet cossettes — slices of beets — go into the bottom of the tower, which is a vessel that is about 35 feet wide and 115 feet tall. It works like a big grain auger, with flighting that slowly lifts the beet pulp up as hot water cascades down, flowing through and removing the sugar. When the pulp comes out the top, it is dried and sold as livestock feed.
When full, the tower holds 3,000 tons of compressed pulp.
"When your diffusion tower fails, your whole factory stops because you don't have a backup diffusion tower," he says. Components in the bottom third of the tower had to be replaced.
BMA, the German manufacturer who made the tower, last summer had done a detailed inspection and concluded it was in good shape. "None of us could have anticipated it," Wickstrom says of the failure. A cause has not been determined.
Wickstrom praised the Minn-Dak staff and the repair teams for getting the piece repaired in 13 days, rather than the 30-day norm. BMA had a technician on-site within 36 hours of the failure.
BMA air-freighted a new set of bottom screens from Germany to fit the factory's unique size. Other equipment was twisted and custom-made at machine shops "from Winnipeg to Minneapolis," Wickstrom said. Two crews of 20 outside contractors were on site 24 hours a day, taking broken pieces out of the tower and putting in new pieces as they arrived.
Wickstrom was "very disappointed that it failed, but we did everything we possibly could to minimize the downside," he says.
About 130,000 tons of beets would have been processed through that down time. Minn-Dak had expected to process 2.56 million tons but now expect to slice 2.43 million to 2.46 million tons.
The good news is the beets are storing better than expected.
In mid-May, a pile at the factory that was simply covered in plastic had about a foot deep of deteriorated beets on the top — "empty carcasses" — and that insulated the beets below. Even after 90-degree days in May, the piles are "frozen to the top," insulated by a slimy layer of 1.5 feet of deteriorated beets on the surface.
The company is working on its final exterior pile and then will go to its three sheds with 80,000 tons each. Minn-Dak for the first time leased "chillers" to keep the beets in those sheds frozen. "We added a chiller system to the middle shed five weeks ago, and when we opened the doors to put the chiller in that shed, there were ice chunks on the floor," Wickstrom says.
"We had a nice cold winter to get them frozen very hard. That's certainly helping us now and paying off," he said.
Some of the cost may be covered by insurance, but final estimates on that won't come until September or October.
Last November, Minn-Dak projected a "conservative" $32.50 per ton for the 2017 crop, based on average quality sugar. The company made an interim payment June 1 based on $30 per ton for average quality beets.
He doesn't anticipate changing that payment from the $30 to $32.50 per ton range, even with the costs of the breakdown. Shareholder costs vary, and most growers can break even or better at $32 a ton, he said.
The two big unknowns are whether the beets will store for 25 to 30 days and how much and how quickly Minn-Dak's insurance company will cover the multi-million dollar repairs. "It's obviously a very large claim," Wickstrom says, but the company insures other beet cooperatives and "we're optimistic they'll be fair."
The delayed slice campaign will mean the company's 2018 crop harvest date will be around Sept. 18. Over the past five years, the harvest at times has started as early as late August.
Typically, harvest starts from the third week in August until mid-September, depending on crop size and development.
The co-op also cut back 2018 acres to 88,000 planted acres, down from 95,000 acres in 2017. That assumes 30-ton per-acre average yield that growers have achieved over the past three years.
American Crystal Sugar Co., based in Moorhead, Minn., completed its slice May 23. They harvested more than 12 million tons, a record, and started processing in their five factories on Aug. 17, "It was a very good storage year," said Brian Ingulsrud, vice president for agriculture. "We had a cooler than normal spring which really helped for good storage of the beets."