FARGO, N.D. - Minn-Dak Farmers Cooperative of Wahpeton, N.D., notched its 45th annual meeting at the Fargo Holiday Inn, celebrating another big crop and payments at profitable levels.
Kurt Wickstrom, Minn-Dak Farmers Cooperative president and CEO, announced $32.50 per ton as an initial payment, "which we hope is conservative," he said. That's "not a great number" but a "pretty significant improvement" over last year, which was bedeviled by processing difficulties.
The co-op's 2017 crop averaged 32.3 tons per harvested acre, compared to 2016 at 32.4 tons. The company reduced planted acres by 17 percent and growers still were asked to leave 5 percent of their beets in the field unharvested.
Growers harvested 30.6 tons per planted acre (with non-harvested acres taken out). The initial payment is designed to produce $1,000 per acre in gross payment, which should help carry the load when corn and soybean prices are low, he said.
"Quite honestly, they need it," Wickstrom said, noting that grower costs have increased over the years.
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Shareholders delivered 2.91 million tons, which is at the outer edge, at 17 percent sugar content, versus 15.7 percent in 2016, and purity at 89.4 percent compared to 88 percent in 2016. The co-op expects to process beets "right until the end of May" in 2018.
"The improvement in sugar content and quality is likely due to the intensive cercospora leaf spot management by growers," he said. The delivered sugar increased 1.25 percentage points because of better disease control. Most growers sprayed four or five times or more.
This is the second year Minn-Dak has exported beet pulp pellets to China as a source for that country's growing dairy industry. Wickstrom discussed a "necessity" to find co-op efficiencies and at the grower level, "assuming soft market prices going forward."
New incentives
Wickstrom said the co-op over the next several months will ask growers whether they'd accept a system that would incentivize them to produce higher recoverable sugar per ton.
"We can only process so many tons of beets," Wickstrom said. Growers can affect that in various ways, including nutrient management, variety selection and disease control.
Brent Davison of Tintah, Minn., stepped aside after serving 14 years on the board, including the past five as chairman. Davison's father, Earl, had served as the second board chairman at Minn-Dak, which was the first of the beet sugar companies established as a farmer-owned cooperative. Davison, 67, said his most important accomplishment was helping the board select a changeover in management to Wickstrom. He said he decided to step aside prior to reaching his 15-year maximum to make way for younger leaders.
Davison said a changeover in the processing staff bodes well for the future. "With new hires, a new culture, a kind of a new attitude, I think we're on our way to bigger and better things," he said. He said the domestic sugar producers continue to battle with the Sugar Users Association and must defend their political situation.
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Wickstrom said the Washington outlook is "confused" on the North American Free Trade Agreement and the farm bill. He said the co-op failed in an effort to preserve a pass-through deduction in the congressional tax reform package. The lost Section 1999 DPAD (Domestic Producer Activities Deduction) for cooperatives to pass through to members will cost the average 500-acre beet co-op shareholder $15,000. Sen. John Hoeven, R-N.D., sponsored a measure that failed in the Senate, and the DPAD also failed in the House version.
Wickstrom said June 6, 2017, amendments "appear to be working" to stem the tide of sugar imports illegally flowing from Mexico under NAFTA. The amendments went into effect in October 2017.
American Crystal Sugar Co. of Moorhead, Minn., holds its annual meeting in Fargo on Thursday, in conjunction with the Red River Valley Sugarbeet Growers Association.
