By Mary Kennedy
DTN Cash Grains Analyst
The 2019 sugarbeet harvest in the Red River Valley ended on Nov. 9 when American Crystal Sugar Company (ACSC) was no longer able to continue taking frozen beets to process, leaving farmers with unharvested beets, some of which will stay in the field and rot over the winter.
American Crystal Sugar Company is an agricultural cooperative corporation owned by approximately 2,800 sugarbeet growers in the Minnesota and North Dakota areas of the Red River Valley. The Red River Valley forms a band approximately 35 miles wide on either side of the North Dakota and Minnesota border and extends approximately 200 miles south from the border of the United States and Canada, according to the company website. The company purchases all of its Red River Valley sugarbeets from members under contract with the company.
American Crystal is the largest beet sugar producer in the United States and has two locations in eastern North Dakota, three in northwestern Minnesota and one plant in northeastern Montana. The company, through its wholly owned subsidiary Sidney Sugars Incorporated, owns and operates a sugarbeet processing facility in Sidney, Montana, which processes nonmember sugarbeets from approximately 30,000 acres.
The nonstop rains at the end of September and into October caused muddy conditions at the start of harvest; after it snowed, the melted snow just added more water to the ground. When the freeze came, many of the sugarbeets were frozen in the ground. Matthew Krueger, an East Grand Forks, Minnesota, grower told me ACSC sent a text to member growers on Nov. 3 that frozen beet quotas had been removed in all districts, and growers could deliver any frozen beets that were mud free. He said by Nov. 9, another text came saying that ACSC was ending harvest of all beets because of poor beet conditions, along with high levels of mud and leaves, making them uneconomical to process.
I spoke with Krueger while he was combining soybeans and he told me his harvest ended early in November after realizing the beets he was harvesting were too full of mud chunks, making it harder for ACSC to process. "We had to leave a significant portion of our beets in the ground, unable to finish the long, at times difficult, harvest," said Krueger.
It is important to note that the root of the sugarbeet is what contains the high concentration of sucrose and is grown commercially for sugar production. As Knutson pointed out, his unharvested beets will become cattle feed this year and that consists of just the roots, not the tops.
Wikipedia notes that, "The root of the beet contains 75% water, about 20% sugar and 5% pulp. The exact sugar content can vary between 12% and 21% sugar, depending on the cultivar and growing conditions. Sugar is the primary value of sugarbeet as a cash crop. The pulp, insoluble in water, is mainly composed of cellulose, hemicellulose, lignin, and pectin, is used in animal feed. The byproducts of the sugarbeet crop, such as pulp and molasses, adds another 10% to the value of the harvest."
Krueger said that in years where there is an early freeze, a sugarbeet can thaw and "heal itself," but will lose some sugar content. This fall, after the heavy rains, muddy fields and then a freeze, the beets were unable to recover. He said the ACSC actually took in close to 1 million tons of frozen beets, but some of the beets began to rot, and the excess chunks of mud became problematic.
"As co-op members, the amount of sugarbeets a grower is expected to deliver to ACSC depends on how many shares they own," Krueger said. "One share plants 0.8 acres and in my case, I grow about 680 acres of sugarbeets." Krueger estimates that there may have been as much as 65% of the harvest lost in parts of the Red River Valley.
"Our contract does have act of God in there, but it also has clauses in there that if unable to deliver beets, you may be obligated for fixed costs," said Krueger. "That cost for this year has been set at $343 per acre by ACSC for the unharvested acres."
I asked Krueger about how much crop insurance will pay, and he said, "For simple math, insurance will pay for 60% of what I could have made on our beets. But, input costs are roughly 60%, so the fee puts us in the red. It also depends on how high your cost of production is, and it can vary several hundred dollars between growers. One thing to note is as shareholders we are paying in in order to keep the co-op financially sound."
Krueger said his beets left in the field will be left to rot until spring and that he will use a rotary beater to chop the greens off the top before then. Krueger also grows corn and soybeans and will rotate one of those crops in to that field next spring. He also noted that spring wheat could work, but next year may be rough where beets had rotted. He said although other growers do rotate wheat in, in his opinion, corn is the best choice. His rotation on beets is three years. "I have a 3,000 acre farm so I am always rotating," added Krueger.
USDA LOWERS PRODUCTION
In the Nov. 15 Sugar and Sweeteners Outlook Projected, USDA Economic Research Service noted that U.S. sugar production for 2019-20 was reduced, as both cane sugar and beet sugar production were lowered based on most recent crop data. "Domestic deliveries for 2019-20 were reduced as well, based on lower forecast totals than previously reported for 2018-19. Reported ending stocks by domestic processors and refiners for 2018-19 resulted in an ending stocks-to-use ratio of 14.5%. Projected sugar exports are down from the previous month, as the availability of fewer supplies is expected to reduce the volume of shipments to non-U.S. markets."
USDA said production for 2019-20 has been hampered by cold, wet weather conditions in most of the key sugarbeet producing regions during the harvest season. Through Nov. 3, the national sugarbeet harvest was only 70% complete and the slowest pace on record since 2000. This was mainly due to record-slow harvest progress made in Minnesota (70%), North Dakota (67%) and Michigan (55%).
"At the time of the WASDE release, growers were still contending with freezing temperatures and wet soil conditions, which can hinder growers' ability to get in the field, harvest sugarbeet roots from the soil, and provide healthy, clean beets that can be stored and processed during the winter and spring slicing season. The likelihood of unusually high levels of sugarbeets being left unharvested has been increasing as winter conditions continue in those states," noted USDA.
"The reduction is primarily in Minnesota and North Dakota, the first and third largest sugarbeet producing states. The reduction is due to lowered harvested area forecasts, currently at 971,000 acres -- an 11.3% reduction from the October forecast. If realized, this would be the lowest harvested acreage total since 1960-61." Here is a link to the entire Nov. 15 report: https://usda.library.cornell.edu/…
On Nov.18, USDA announced it intends to take appropriate actions to ensure an adequate supply of sugar to the U.S. market as prospects for U.S. sugar production have declined significantly due to adverse weather in sugarbeet and sugarcane regions. With a 10.5% ending stocks-to-use ratio forecast for fiscal year 2020, USDA will be addressing options in the near future in order to stabilize U.S. sugar supplies. USDA noted that it intends to make an announcement between Nov. 18 and Dec. 10 as to quantity, type and source of additional sugar needed to ensure an adequate supply for the domestic market, avoid forfeitures and prevent or correct market disruptions.
To say the 2019 sugarbeet season has been rough is putting it mildly. Knutson said, "Yes, the struggles were real and took their toll on growers. No ton came through the gate that did not have sweat and blood involved. Many went above and beyond what was expected to get the crop in." Knutson added that during this growing season "we had snow, rain, frost, flooding and a freeze; about the only thing we didn't have was locusts."
He was, of course, referencing one of the seven plagues listed in the bible in Exodus 10:1--20. Basically, the prophecy is that locusts would swarm Earth and eat away all of the plants leaving nothing. Knutson's comment gives a pretty good indication of just how bad the 2019 sugarbeet harvest season was for many growers.
ACSC is holding factory district meetings the week of Nov. 18 to inform growers what to expect this winter, added Knutson.
Mary Kennedy can be reached at firstname.lastname@example.org
Follow her on Twitter @MaryCKenn
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