American Crystal Sugar Co. will no longer contract with sugarbeet growers who raised the crop for Sidney (Montana) Sugars Inc. and plans to begin shuttering the factory in April.
American Crystal Sugar Co., based in Moorhead, Minnesota, announced on Monday, Feb. 6, that it was going to close the Montana plant because Montana-Dakota Beet Growers Association farmers who grow sugarbeets for the company showed there no longer was adequate interest in growing enough of the crop to sustain operations and that plant closure proceedings would begin April 14, 2023.
Sidney Sugars Inc. completed processing the 2022 crop in December of that year, but will continue cleanup work in the factory until April and warehouse operations will continue into the summer.
About 300 employees work at Sidney Sugars Inc. They will receive severance packages and the company provided resources to assist them with job searches, including an opportunity to join other American Crystal Sugar Co. factories in the Red River Valley, American Crystal Sugar Co. said.
About 75 farm families grow sugarbeets for Sidney Sugars Inc., which is a wholly owned subsidiary of American Crystal Sugar Co. American Crystal Sugar Co. purchased the Holly Sugar Corporation factory from Imperial Sugars in 2002 and named it Sidney Sugars.
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The amount of sugarbeet acres contracted with Sidney Sugars has been declining for the past few years, Steve Rosenau, American Crystal Sugar vice president for agriculture and Sidney Sugars Inc. CEO said in a prepared statement.
Rosenau declined to answer Agweek’s questions about the closure, referring a reporter to the American Crystal Sugar Co. communications manager.
“Due to an ongoing insufficient supply of sugarbeets from the local growers, it has become financially unsustainable to continue operating the nearly 100-year-old business,” Rosenau said in the news release.
Farmers offered 19,500 acres for contracting for the 2023 growing season. In 2022, there were 18,400 contracted acres and in 2021 there were 30,774 acres contracted with Sidney Sugars Inc. In the 1990s growers contracted as many as 45,000 acres, he said
“With only 19,500 acres of sugarbeets offered in the region for this coming spring, the Sidney operation is simply not profitable,” Rosenau said in the news release.
The partnership between Sidney Sugars Inc. and American Crystal Sugar had been mutually beneficial until now, the news release said.
However, Don Steinbeisser Jr. a Sidney, Montana, farmer and former president of Montana-Dakota Beet Growers Association, doesn’t characterize the relationship between American Crystal Sugar Co. and Sidney Sugars Inc. that way, and he wasn’t surprised by the news of the closure.
Steinbeisser Jr. , whose family grew sugarbeets for 90 years in eastern Montana, has expressed concern about the future of Sidney Sugars Inc. for at least 15 years .
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The reason that sugar beet acreage has declined is the result of the $1 to $2 reduction in payments that American Crystal Sugar Co’s consistently has made in its contracts for several years, Steinbeisser Jr. said.
"They came to us last year with a contract that took $2 more a ton away, and we said we were done,” Steinbeisser said, “Right now we can get just as much money off of corn and soybeans, an acre, as we did off of the sugarbeets,” he said.
Besides receiving competitive prices for those crops, they require less labor and less machinery to produce, he said. Steinbeisser eliminated the need for five pieces of sugarbeet equipment, trucks, trailers and the headache of finding labor when he quit growing the crop.
In 2017, some farmers who grow sugarbeets for Sidney Sugars Inc. formed a cooperative called Big Sky with the intent of purchasing Sidney Sugars Inc. from American Crystal Sugar Co.
Big Sky Co-op’s attempts to buy Sidney Sugars Inc. were unsuccessful because American Crystal Sugar Co. raised the price to a level that it couldn’t afford, Steinbeisser said. Now, the Sidney Sugars Inc. factory is in need of major repair, and it would cost so much to fix it wouldn’t be cost-effective.
“I hate to see it gone. We lose a factory. We lose jobs in Sidney," Steinbeisser said.
Luther Markwart, American Sugarbeet Growers executive vice president, also expressed sadness about the loss of the Sidney Sugars Inc. factory.
“The sadness is for the growers, the employees when a factory is closing. I’ve been working in sugarbeets for 40 years, and I think this will be the 24th sugarbeet factory closing since the 1980s, and it’s all hard,” Markwart said.
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