COVER STORY: Southern Minnesota beet co-op grower shoots for sugar

SACRED HEART, Minn. -- From Rick Schwindt's vantage, on the farm some 14 miles west of the Southern Minnesota Beet Sugar Cooperative plant in Renville, Minn., life is looking good.

"The crop is off to a pretty good start," Schwindt says.

He's a partner with his wife's uncle, Sam Dahlager, in a farm that produces corn, soybeans and beets.

"We've been getting a little rain, but we're pretty dry," Schwindt says.

This is the first year his crop is all Roundup Ready.

The Dahlager-Schwindt partners started planting April 17 and finished the beets by April 19. They finished the corn April 20 and the soybeans May 7.

"We had some rains early on, and that helped get things up," Schwindt says. "We tried starter fertilizer for the beets and corn this year. We're a little on the dry side. It seems like the rains come and then split -- one system goes north and the other south."

Roundup Ready beets have been a tremendous advantage.

"The beets look cleaner than they ever have," he says.

He'd sprayed twice with glyphosate and Select herbicide to kill the corn by the end of June. He expected to start with fungicides by mid-July, with perhaps three applications.

Colorado transplant

Schwindt is originally from Colorado As a young adult, he helped his grandfather and uncle raise sugar beets, silage corn and pinto beans in the Fort Collins, Colo., area. Things changed when church friends set him on a blind date with Sheri Dahlager, who was in Colorado on spring break from Evangel University in Springfield, Mo. Sheri is the daughter of Gale Dahlager, a farmer from Sacred Heart.

Rick and Sheri moved back to Minnesota and started farming in 1986. That worked out especially well as Gale started a stint as Renville County, Minn., commissioner in 1984.

Schwindt, now 53, partnered with his uncle, now Sam Dahlager, 56.

Ten years ago, they started with 80 acres of beet shares. The next year, they bought the remaining acres and ended up with 250 acres. The co-op now allows planting 98 percent of share acres, so the Dahlager-Schwindt partnership has picked up a few more shares on joint venture to stay at the full 250 acres.

The partners also share equipment on the beets with another farming partnership -- Johnson Seed Farm, which includes another uncle, Howard Dahlager, and his sons, Nathan and Eric, who live about five miles away.

"We have a lifter and a topper and two semis," Schwindt says. "They have two semis. If we have enough miles and acres, we can usually rent another semi."

Harvest usually takes about two weeks to get done, without any weather problems. Two years ago, they started taking turns with the day- and night-shifts during the harvest, and that's worked out well. They also take turns with the harvest, working two days on one farm and then the next two days on the other farm.

Kinship with the RRV

Schwindt has a personal interest in what happens in the Red River Valley.

He gets to view the valley's crop progress more than most of his neighbors as his son, Mitch, attends Mayville (N.D.) State University, where he majors in accounting and plays football and baseball.

But there is a corporate interest, shared by all of his fellow co-op members.

SMBSC has a long history in common with sugar beet growers in the Red River Valley.

All three are farmer-owned co-ops -- including American Crystal Sugar Co. of Moorhead and Minn-Dak Farmers Cooperative of Wahpeton, N.D.

All started in either 1972 or 1973. American Crystal was retained on an interim basis to manage operations for the cooperative in the mid-1970s. The three co-ops have marketed their byproducts together continuously since 1982.

In 1993, SMBSC marketed sugar as part of United Sugars Corp., but in 2002, it announced plans to pull away and market sugar through Cargill. In the past year, SMBSC has changed management to Kelvin Thompsen, president and chief executive officer, taking over from John A. Richmond. Thompsen wasn't immediately available for an interview for this story, but several growers give him positive marks.

Promoted from SMBSC's post of vice president of agriculture, Thompsen also had served as chief executive officer for SMBSC's Spreckles Sugar Co. Inc. subsidiary.

Before coming to SMBSC, Thompsen had held posts with Holly Sugar Corp. in the Rocky Mountains and California, ending with corporate general manager-agriculture.

There is less information available publicly about SMBSC than the Red River Valley cooperatives because it only ever offered its shares within the state of Minnesota, not across state borders. Consequently, there are no Securities Exchange Commission reports and filings.

Formed in 1972, SMBSC has some 585 farmer-shareholders, according to other legal documents. It has reported employing about 275 people year-round and 450 seasonal workers. There was an extensive renovation to the plant in 1999. The co-op suffered some losses in stored beets in 1999 and 2000 crop years, as well as losses and delays as a result of a boiler failure in 1999.

Since then, things have steadily improved.

A decade later

Schwindt remembers the difficult times. His partnership got into sugar beets in 1999, just as SMBSC suffered its untimely freeze.

"That was an experience," Schwindt says. "The insurance was fair to us, but it was a long, drawn-out thing. But it came around. It was tough that year, but the beets have been helping us out all along. You could count on the beets when corn and bean prices have been up and down. The beets have hung in there quite well."

Share prices in the co-op aren't at the $1,250 he and Dahlager paid for them, but it's still worked out.

Schwindt says sugar beets continue to work well on his partnerships farm. The farm's soil is mostly loam, with some sandy spots in the eastern acreages and some lower areas.

"We've had good crops. We try to keep it on a four- or five-year rotation," he says. "We have 2,000 acres total. We've always had above-average sugar and yield."

Schwindt thinks his yield ran 22 to 24 tons per acre in 2008, with sugar often a full percentage point higher than average. More than ever, the co-op is shifting to paying on sugar content, more than tonnage, and that's good.

"That's the push, so they can have less material running through the factory," Schwindt says. "Old school was to put quite a bit of fertilizer, and they've cut that back. It's shoot for sugar, shoot for sugar."