American Crystal shareholders to be paid $37 per ton for this year's crop
American Crystal Sugar Co. told its shareholders this week that they will receive $37 per ton for the 2019 sugar beet crop.
That’s about $14 per ton, or 28%, 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 Tuesday, Nov. 19, and in East Grand Forks, Minn., and Hillsboro, N.D., on Wednesday, Nov. 20. The factory district meeting in Moorhead, Minn., will be Thursday, Nov. 21 .
About 2,800 Red River Valley farmers grow sugar beets for American Crystal Sugar. In 2018, farmers who grow sugar beets for the company produced 11.1 million tons. The 2018 sugar beet 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 66% 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% of his crop – or 424 of his 682 sugar beet 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.
“Short-term pain for long-term gain,” Krueger said. “Crystal is us; that is our company.”
Since American Crystal Sugar is a cooperative, Krueger said the money farmers pay for the unharvested acres ultimately will be returned to growers.
Not all of the cooperative's farmers feel the same way, Krueger acknowledged. The meeting he attended lasted three hours, which is longer than fall meetings typically last, in part because some growers are unhappy with the way management handled some of its decisions this fall.
“I think the big thing some growers aren’t grasping is that if the company doesn’t do well, it will affect us,” Krueger said.
There’s talk among some farmers who grow sugar beets for American Crystal that they don’t believe it’s worth it to put in another crop next year. Krueger is not among them.
“I love this co-op. I think it’s the best co-op in the whole world,” Krueger said.