MOORHEAD, Minn. — The recent infusion of federal disaster aid for the 2018 and 2019 crops has been vital to keeping some sugar beet growers financially viable, says Tom Astrup, president and chief executive officer of American Crystal Sugar Co.

Astrup says American Crystal separately raised its projected payment by 8%

“The relief was tremendously helpful,” Astrup said. American Crystal received $82 million, which was part of $285 million nationally for sugar companies, after a crop disaster in 2019.

The program allocated funds to farmers with the cooperative at a rate of about $207 per planted acre in 2019. About 30% of the co-op’s acreage went unharvested in 2019, in part because of wet conditions in September and then untimely freezing and snow in October.

Usually, farm harvest losses tend to be compensated on the farm that had crop losses, but in a cooperative, all members suffer losses when some members can’t harvest, Astrup noted. Those who harvested “were harmed as much, sometimes more” than those who couldn’t harvest, he said.

Astrup said there are “a lot of ways we could have done it,” but he thinks the method was “generally well-received,” and decided on by the board of directors, who are farmer-shareholders geographically dispersed across the company’s five factory districts, including Moorhead, East Grand Forks and Crookston in Minnesota, and Hillsboro and Drayton in North Dakota.

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The co-op started making payments to growers on March 30, and about 97% had been paid out as of April 14. The few left have not filled out applications as yet.

In early April, Crystal’s board approved increasing the projected payment for the 2019 crop to $40 an acre, an 8% increase from the initial projection of $37 per ton. The $40 per ton is applied over 7.5 million tons, or $300 million.

That projection is 27% less per ton compared to a final payment of $54.78 per ton for the 2018 crop, but that crop was 11 million tons, so the payment is about half of the $600 million.

The short crop meant for a short processing season, which ended as early as Feb. 3 at Hillsboro, Feb. 15 in Crookston, Feb. 26 in Moorhead, March 1 in East Grand Forks, and April 5 at Drayton.

New twist

Astrup acknowledged that the payment was a new twist in funneling aid through the cooperative, although there had been a similar plan for aid to the Southern Minnesota Beet Sugar Cooperative in Renville, Minn., after 2018 crop losses because of excessively wet conditions.

Astrup credited Sen. John Hoeven, R-N.D.; Rep. Collin Peterson, D-Minn.; and Bill Northey, U.S. undersecretary of agriculture for farm production and conservation, for making it happen.

Astrup said American Crystal so far has been able to operate their processing plants throughout the COVID-19 pandemic, according to the guidance established by the Centers for Disease Control. “The good news is we have a license to operate because we’re in the food industry and customers are still buying sugar,” he said.

Astrup acknowledged that growers of American Crystal Sugar’s wholly-owned subsidiary, Sidney Sugars Inc., at Sidney, Mont., which ended processing on March 4, did not receive disaster funds in the same way as co-op members in the Red River Valley.

Don Steinbeisser, Jr., a director of the said growers in the Montana Dakota Beet Growers Association, have been attempting to apply for disaster funds through “WHIP+” program (Wildfire and Hurricane Indemnity Program Plus), as they would with any other crop. He said he doesn’t have a clue how much that program will provide, but noted that the group is getting back surveys that indicate whether members had crop insurance or didn’t, to help determine compensation.

“We’re working with the RMA (Risk Management Agency) folks back in D.C.,” he said.

Beets that were harvested normally came in at a respectable 31 tons per acre. Farmers hauled beets under a “frozen beet addendum” to their contract, but many didn’t last in storage and had to be hauled out onto fields, at farmer expense. Beets lost more than 1 percentage point of sugar content because of the conditions, he estimates.

Stock value effect

Through April 1, 3,892 shares were brokered for an average price of $3,193.60 per share.

“The strength in the beet stock market has surprised most people this year including myself,” says Jayson Menke, owner of Acres & Shares, one of four companies that’s brokered beet stock this season. “After a disastrous harvest campaign which lead to a disappointing fall forecast payment, it’s remarkable that stock has averaged nearly $3,200 per share for the trading season to date.”

Last year 4,085 shares were brokered for an average price of $3,361.81 per share during the 2018 to 2019 trading season. The 2017-18 season had 4,659 shares brokered at an average price of $2,940.23 per share.

“Back in November, I though the wildcard in the market would be how many farmers would need to sell shares because of financial struggles,” Menke says. “While some growers did need to sell shares, through early April there has not been an abundance of shares on the market and there has been adequate demand throughout most of the season lead by optimism in the sugar industry.”