Sugar beet farmers from the region not only will receive lower payments for the 2019 crop year, but some likely will owe American Crystal Sugar Co. for beets that will go unharvested this fall.
On Tuesday, Oct. 29, a farmer from Hillsboro told the Herald that 2019 will go down as the most difficult season in his 40-year career.
“I’ve never left beets in the field in this kind of volume before. This is history," said Jason Siegert. "This isn’t just one of the toughest years, it’s the toughest.”
Wet conditions have made it, at best, difficult — at worst, impossible — for American Crystal Co. shareholders to dig sugar beets. That, also combined with freezing temperatures, has reduced the quantity and quality of the crop.
“Generally speaking, the payment will be lower because of the reduction in tons,” said Brian Ingulsrud, American Crystal Sugar vice president-agriculture. “When you have less tons to spread out the fixed costs over, the payments will be lower.”
American Crystal Sugar Co.'s gross payment for the 2018 sugar beet crop was $51 per average ton, said Jeff Schweitzer, American Crystal Sugar Co. spokesman. The final 2018 payment has not yet been announced.
“Anytime it goes below freezing, there is potential for damage,” Ingulsrud said. “It gets more severe as temperatures go lower than 32 degrees. When they go lower than 25, its gets very concerning as far as that beet being storable.”
Sugar beet receiving yards in American Crystal Sugar's five factory districts were closed Tuesday morning because of freezing temperatures, but planned to open in the early afternoon. According to information on the cooperative’s website, American Crystal will accept the freshly topped frozen beets of farmers in the East Grand Forks and Moorhead factory districts.
Siegert, an American Crystal Sugar Co. shareholder in the Hillsboro Factory District, said that the notice about accepting freshly topped frozen beets was factorywide.
“We just got a release they are going to take frozen beets,” Siegert said Tuesday morning.
He said American Crystal Sugar Co. said it wants farmers to harvest about 1 million tons of frozen sugar beets. American Crystal usually does not accept frozen beets because of storage issues.
Farmers who grows sugar beets for American Crystal Sugar Co. typically harvest a total of 11 million tons, said Tom Astrup, president and CEO of American Crystal Sugar. About 6.5 million tons have been harvested so far this season, Astrup said.
Siegert has the bulk of his crop still in the field because his land is too wet to support harvest equipment. On Tuesday, he still had not harvested 900 of the 1,050 acres, or nearly 90%, of the sugar beets he grows for American Crystal.
“We probably won’t get them,” Siegert said. “We’ve never seen conditions quite like this where it is this wet. The ground is so wet, you can’t carry a tractor in the field.”
That’s despite outfitting some of his sugar beet equipment with larger tires and putting tracks on other machinery, he said.
“We’ve had two 600-horsepower four-wheel-drives on the beet lifter pulling it out,” Siegert said. “Every morning we have a prayer to hope that we don’t bury everything.”
Most of the sugar beet farmers in the Hillsboro Factory District are in a similar situation, Siegert said. He called the number of farmers in the Hillsboro district who are harvesting “a drop in the bucket. “
The farmers who can’t harvest, including Siegert, are helping those who can, Siegert said.
“We’re trying to get the beets in so we can get a payment for the people that are digging, and so the people who aren’t digging won’t have as much fixed cost,” he said.
An Oct. 16 letter that American Crystal Sugar Co. sent to shareholders and obtained by Mikkel Pates, an Agweek reporter, said the company’s “Five Year Agreement” provides that shareholders “may be charged liquidated damages” equal to the company’s fixed costs if shareholders fail to deliver their sugar beet crop.
Ingulsrud on Tuesday declined to speculate on what the financial impact on American Crystal Sugar Co. shareholders will be if sugar beets are left in the field and from storing a crop that was damaged by frost.
“That’s yet to be seen. ... There’s still time to harvest beets and our harvest will continue," Ingulsrud said.
Said Siegert: “This is all uncharted territory. We are writing history, and it is history I don’t want to be part of.”