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Minn-Dak beet co-op steps up with $44 per ton net payment

Minn-Dak Farmers Cooperative of Wahpeton, North Dakota, members gather on Dec. 9, 2021, for their annual meeting. The company projects a $44 per ton initial payment for the 2021 beet crop which is 15% better than the 2020 payment. Shareholders are hopeful the company is recovering after recent difficult years.

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Kurt Wickstrom, president and CEO for Minn-Dak Farmers Cooperative of Wahpeton, North Dakota, told shareholders at the beet processing co-op’s annual meeting in Fargo, North Dakota, on Dec. 9, 2021, that the company’s beefed-up processing plant is working at record-breaking efficiency. The company is projecting an initial improved net beet payment of $44 per average ton of beets for the 2021 crop, which was larger and higher in sugar than expected. Photo taken Dec. 9, 2021, in Fargo, North Dakota. Mikkel Pates / Agweek
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FARGO, North Dakota — Minn-Dak Farmers Cooperative continued to make forward steps, after several difficult financial years.

The company’s 49th annual meeting in person on Dec. 9, 2021, in Fargo, with strong attendance after a largely virtual meeting last year due to COVID-19.

Minn-Dak officials described a 2021 crop started out in a drought. When the company pulled August beet samples they expected a lackluster 25-ton crop. Then the rains started, and the crop put on one-third of a ton per acre per day for 35 days.

“Yield growth rates we’ve never experienced in the history of the co-op,” said Kurt Wickstrom, president and chief executive officer. The crop ended up over 31 tons per acre, meaning they couldn’t harvest all of the acres. They left 7% unharvested.

In a scripted, joint speech, Wickstrom and Pat Freese, Kent, Minnesota, chairman of the board, who said the investment steps were needed and are “getting our facilities up where we needed to be.” Freese said it seemed the company is again becoming a “shining star” as a value to its shareholders.

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The single-plant cooperative, based in Wahpeton, North Dakota, forecast an initial net payment $44 per ton for “average quality sugar beets” for the 2021 crop. That’s a net payment after taking off $2 of allocated patronage. It doesn’t include $1.20 per ton trucking payment Minn-Dak pays growers for trucking beets.

That’s a 46% increase from last year’s initial projection and 15% higher than last year’s final payment. Minn-Dak payments are made to growers in four stages over the year. Last year, the projected payment started at $30 and ended up at $38.40 per ton.

About 3.05 million tons of beets were delivered this year, and the company expected to process 2.7 million to 2.8 million tons. The company anticipates processing through the end of May.

“We’re having a good campaign now. We just need Mother Nature to give us some cool temperatures after Christmas so we can get the piles froze, and continue slicing beets and making lots of sugar," Wickstrom said.

That’s 500,000 tons more than in the previous year. “We’re slicing more tons this year than last at a higher sugar content,” Wickstrom said. Sugar content ended up at 17.63%.

Revenues will increase $70 million to $80 million over the previous year, which Wickstrom acknowledged will be felt in the community.

Minn-Dak shareholders over the past four years have re-invested in their plant and so far this campaign is exceeding production targets, setting historical sugar granulation records.

The company has invested about $24 to $26 million in capital improvements — evaporators, slicers, and other equipment. Wickstrom noted they invested $5.5 million to cover a 40-million-gallon processed water pond, eliminating odors for their community.

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The company will capture methane to use as an energy source or will scrub it and put it back into pipeline to generate revenue.

Wickstrom said that as the investments come into play, Minn-Dak co-op members will receive returns on par with other co-ops. (American Crystal Sugar Co., based in Moorhead, Minnesota, last week projected an initial beet payment of $60 per ton, but the math is not the same.)

On one of the bright notes, Minn-Dak is looking forward to an option of a high volume, uninterruptible supply of natural gas to the community, in place over the two to four years. Currently, they use coal, which is by far more cost-effective but whose future use could be increasingly limited by environmental regulations.

Wickstrom said the plant produced 1 million hundredweight of sugar in the month of October, nearly came "darn close" to matching that in November and is on track for strong results in December. Wickstrom said that CoBank, the co-op[s lender has noted an improvement in the company’s financial status, and said the equipment improvements allow the company to “grow our footprint through expansion” if that makes sense.

The farm bill sugar provisions and trade “suspension agreements” with Mexico appear to “support a strong price for sugar for sometime in the future,” he said.

Also at the meeting:

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Brent Sanford, North Dakota lieutenant governor, speaking to the Minn-Dak Farmers Cooperative’s 49th annual meeting in Fargo on Dec. 9, 2021, in Fargo, North Dakota, said his government is helping farmers guard against “regulatory overreach” in the Democratic administration of U.S. President Joe Biden. Photo taken Dec. 9, 2021, in Fargo, North Dakota. Mikkel Pates / Agweek

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  • North Dakota Lt. Gov. Brent Sanford, a Republican, addressed the co-op members, saying his administration is working to prevent negative impacts of “federal overreach” in the Biden administration. Among the concerns are “overreaching vaccine mandates on private business,” he said, and a re-energization of the Waters of the United States. Farmers in the Northern Great Plains in the Prairie Pothole country pushed back on WOTUS regulations because they felt the regulations went too far in limiting how farmers could farm cropland that contains wet spots that come and go within cropping seasons and between years.

  • Jim Wiesemeyer, Washington policy analyst for ProFarmer, offered a conservative view of the Biden administration and Congress. He expects fertilizer prices to “hold or go up” and said farmers could face delivery problems in the spring, but then said, “I can’t predict that.”

Wiesemeyer quoted sources who predict Republicans will pick up 20 to 50 seats in the U.S. House or Representatives in 2022, and could gain 2 to 5 seats simply due to redistricting. He predicted “dastardly countries” like Russia, China and Iran, will “test” Biden, if he appears weak.
China is the biggest challenge, as they attempt to wrest Taiwan into their influence. ProFarmer consultants believe the Chinese “think the U.S. is on the way down,” and he disagrees and hopes they’re wrong.

Wiesemeyer said the price of corn and who China buys corn from — and in what volumes — will indicate how the country exerts economic leverage. He noted China buys a lot of corn from Ukraine. He predicted bipartisan support for sugar policy, based on past hands-on, effective advocacy by the industry, and noted U.S. Sen John Hoeven, R-North Dakota, will be increasingly important in this issue.

Mikkel Pates is an agricultural journalist, creating print, online and television stories for Agweek magazine and Agweek TV.
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