FARGO, N.D. -- With the prices depressed for competing commodities, demand has rebounded for shares of sugar beet cooperative stock, and more farmers want to grow beets in shares owned by joint venture partners.
Jayson Menke, an ag stock specialist for Farmers National Co. based in Grand Forks, N.D., says interest in joint venture deals has been stronger than normal among farmers.
"In the past 15 years, this is the most demand I've seen from growers," Menke says. "Beets are one of the few or only crops that pencil out (financially) for 2015."
Menke declines to say what FNC's clients are getting for their shares, but acknowledges those deals have changed in character because of hardships absorbed by growers in the 2013 crop year. That year, the price of beets declined, but the deals were largely set in the traditional way, in which the original shareholder -- or limited partner -- simply received a payment from the proceeds of the beet check.
Today, there are more payment options.
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Payment options
Besides paying on the plantable acre, there now are a variety of arrangements for "multiples" of the payments, based on some multiple of the gross or net per-ton payment projections by the company or on the ultimate payment.
There also are sliding scale payments, and the "base payment plus a sliding scale options," Menke says.
Limited partners historically were paid from the proceeds of the mid-November payment, after the sugar beet crop was harvested. Partnership payments were negotiated based on a dollar amount multiplied by the number of shares or plantable acres. Under newer arrangements, a limited partner could receive a payment for the 2015 crop in 2015, and then a "square-up" payment in 2016 when the final payment is known.
Menke also is president and CEO of FNC AgStock LLC, a wholly owned subsidiary of Farmers National, based in Omaha, Neb. This entity is an online clearing house for cooperative share sales.
$2,600 per share
Sales in the 2014 to '15 winter transaction season have ranged from $2,000 to $2,750 per share. The last sale was 220 shares sold on March 12 at about $2,600 per share. FNS AgStock currently has no stock listed for sale, so it is conceivable that is the last sale, which would make it the latest, Menke says. That could indicate farmers are anticipating an early planting season and want their deals made.
"Ideally, all farmers want to have their beets planted in April," he says.
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The range of beet stock prices in 2013 to '14 was $1,200 to $2,000 per share, with the final sale of the season at nearly $1,600. In 2012 to '13, prices ranged from $2,500 to $4,450 per share, and ended the year at the low. In the 2011 to '12, transaction year, the prices ranged from $3,500 to $4,000 per share, ending at $3,800 on March 16 -- another early close, at the beginning of a dry cropping season.
