Sugarbeet growers and processors face several challenges according to association president
Nate Hultgren, president of the American Sugar Beet Association and a farmer from Raymond, spoke at the 99th annual USDA Agricultural Outlook Forum in February.
ARLINGTON, Virginia — Across 11 states farmers grow and harvest approximately 1.1 million acres of sugarbeets annually, which are then processed into sugar at 21 factories owned by nine different cooperatives, including Southern Minnesota Beet Sugar Cooperative in Renville.
"(We) produce a little over half, 54%, of the domestic sugar supply," said Nate Hultgren, president of the American Sugar Beet Association. "We're strategically important to the nation's food supply."
Hultgren, a farmer from Raymond who grows around 1,200 acres of sugarbeets along with other crops and cattle and is also the chairman of the Southern Minnesota Beet Sugar Cooperative board of directors, spoke Feb. 24 at the 99th annual USDA Agricultural Outlook Forum in Arlington, Virginia, on the challenges facing sugarbeet growers and processors. The forum was available in person and online.
Hultgren said having a stable domestic supply of sugar is important as it is a major ingredient in two-thirds of grocery store products. Even in times of global supply chain disruptions, like during the coronavirus pandemic, food producers were able to get the sugar they needed with little issue.
"When you look at the things sugar does, you have to draw the conclusion that sugar is an important ingredient for food security," Hultgren said. "And food security is national security."
Sugarbeets and the sugar produced are also imperative to the rural economies where the factories are located. Hultgren said sugarbeets provide about $11 billion a year to the U.S. economy, with a lot of that going to small towns like Renville and Raymond.
"If sugar wasn't in those towns, we would have no towns," Hultgren said.
Despite how important the sugarbeet industry is to the domestic sugar supply and local economies, it has its share of problems and challenges. Since 1981, 23 sugarbeet factories have closed, leaving only 21, and all of those owned by growers. There isn't a lot of interest in owning sugarbeet factories by private investors; the profit margin just isn't high enough.
"To keep those factories open and make sure they weren't going to close, the sugarbeet farmers rose up and bought the factories from the private companies," Hultgren said.
However, those low profit margins are a challenge for the cooperatives as well, which operate pretty much as nonprofits, since most of the profits go back into the factories or to the growers. Even today there are still factories closing down, such as Sidney Sugars in northeast Montana.
"Typically when these beet factories close, they don't reopen," Hultgren said.
Another problem facing growers, cooperatives and their factories is the growth in costs associated with agriculture. From diesel fuel, which has increased nearly 125% over the last several years, to machinery and other equipment, fertilizer and wages, everything costs more. The factories, which are decades old at this point, are facing high processing costs and aging equipment.
"These costs are hitting our farmers really hard," Hultgren said.
Climate is also turning into a challenge, as both wetter and drier seasons are making it difficult to grow high-yield crops. Other threats to sugarbeets include wind and freezing temperatures. Young seedlings can be pulled out of the soil by high winds, while early cold temperatures can freeze beets.
"We always have the vulnerability of unharvested crop ... freezing in the ground, or pile losses if they spoil," Hultgren said. "And when that sugar amount gets reduced, it hits all the growers in the cooperative, not just the one in the freeze event, because it is less product to process."
To level the playing field, growers and cooperatives are working to make available more protective tools such as better crop insurance and new chemical to help fight disease and weeds. Research also is continuing in areas such as climate, soil health and bio-engineering. The national association is already working with several universities and agriculture research sites.
"Those threats that I'm talking about, we know through research we can address them, but the time is becoming short, the urgency is becoming now," Hultgren said.
With these and other challenges, including labor and technology, Hultgren said growers are in need of a strong sugar policy from the federal government. This includes responding to things such as foreign subsidies and providing a safety net for growers that better represents the sugar marketplace. Sugarbeet growers earn all their revenue from the marketplace and do not receive the kinds of government subsidies available for some other crops.
"Beet sugar needs to remain a strategic and reliable supplier to keep food supply safe and secure. It's an issue of national security. But in order to do that, we need stability and profitability now, to invest in farms and factories for the future," Hultgren said. "We need strong farm and trade policies for sugar farmers to meet those objectives. We want to keep doing this. This is what we love. We're committed to doing sugar beets. We hope we can have some help on that."
Editor's note: The reporter viewed Hultgren's speech using the USDA Agricultural Outlook Forum's online option.