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US sugar producers hope for good news

American Crystal Sugar officials are confident that U.S. sugar producers will get good news Friday, when the U.S. International Trade Commission determines whether to investigate allegations that Mexico is unfairly dumping sugar into U.S. markets...

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A truck load of sugar beets is dumped at the East Grand Forks, Minn., American Crystal Sugar factory. Growers have been told the preliminary payment estimate is $37 per ton for the 2014 crop. Photo by Eric Hylden/Forum News Service

American Crystal Sugar officials are confident that U.S. sugar producers will get good news Friday, when the U.S. International Trade Commission determines whether to investigate allegations that Mexico is unfairly dumping sugar into U.S. markets and suppressing domestic sugar prices.

A petition, filed in March by a coalition of U.S. sugar producers, alleges that the Mexican sugar industry is dumping sugar into U.S. domestic markets and that Mexican federal and state governments have provided substantial subsidies to create cheaper prices and benefit their producers.

Friday's ruling is a preliminary determination. If the ITC agrees that the petition has merit, a year-long investigation would be conducted by the commission and the U.S. Commerce Department.

"We are confident we've made our case," Crystal President and CEO David Berg said Wednesday. "We hope the ITC sees the world the way we see it, that Mexico's been unfairly dumping sugar into our market."

The petition was filed by the American Sugar Coalition, which represents the American Sugar Beet Growers Association, American Sugar Cane League, American Sugar Refining Inc., Florida Sugar Cane League, Hawaiian Commercial Sugar Co., Rio Grande Valley Sugar Growers Inc., Cane Growers Cooperative of Florida, and the United States Beet Sugar Association.

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Crystal, Minn-Dak Farmers Cooperative in Wahpeton, N.D., and the Southern Minnesota Beet Sugar Co. in Renville, Minn., are part of the American Sugar Beet Growers Association.

If the case moves forward, the earliest any interim duties could be imposed on sugar imports would be August, so the impact likely would not be felt until 2015, according to Berg.

Sugar prices to producers dropped nearly in half from a high of $68 per ton in 2012. The latest projected price is $38 a ton.

If the ruling goes against the coalition, it could jeopardize the U.S. sugar industry, it argues, although the impact may not be felt until next year, according to Berg.

"It's not a pretty prospect. It's just not," Berg said. "Something has to give, because the market, plain and simple, is oversupplied."

Planting and shipping

Meanwhile, Crystal officials are dealing with two other immediate issues -- a late planting season and a lingering shortage of railcars to move their product to markets.

"We really would like a sunny week," Berg said. "Nobody's planting yet."

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Delayed planting reduces the sugar beet crop and yields.

A nationwide railcar shortage began to hit Crystal last fall, as harvest began.

By January, Crystal's East Grand Forks production plant was at full storage capacity because railcars were not available, according to Tom Astrup, director of operations.

To deal with the shortage, the company reduced its production for 11 days, stockpiling sugar in warehouses.

BNSF Railway has acknowledged the shortage, Astrup said, and has said it is working to improve the situation.

About 80 percent of Crystal's sugar beet production is shipped by railcar in bulk to customers around the country. The process takes about 12 cars a day at East Grand Forks. The Hillsboro and Moorhead plants need 15.

"We've been able to hang in there," Astrup said. "It's better, but we need it to improve."

The company still is processing the 2013 crop, officials said. The process is expected to wrap up within two to three weeks.

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Jobs available

Crystal, headquartered in Moorhead, employs about 1,800 at its five Red River Valley factories, located in East Grand Forks, Crookston and Moorhead in Minnesota and Hillsboro and Drayton in North Dakota.

The company is continually looking for workers, adding the company currently has 60 to 70 job openings, with the biggest demand for electricians, welders and millwrights, or those with mechanical skills.

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American Crystal Sugar Co. President and CEO David Berg stops by the East Grand Forks factory Wednesday. Photo by Eric Hylden/Grand Forks Herald

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