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A bitter harvest for sugarbeet farmers

Growers face a "devastating" financial hit as nearly a third of the crop sits frozen in the fields.

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Sugarbeet
A pulled sugarbeet rests on David Kragnes' harvester on his farm outside of Moorhead, Minn. in October 2012.
Nathaniel Minor | MPR News 2012

The fall harvest has been a difficult one for Minnesota’s sugarbeet farmers.

Starting in October, fields were too wet for many farmers to dig beets from the ground. Then, in the past two weeks, a series of frigid days froze the unharvested beets still in the fields — and the harvest was officially declared over. Nearly one-third of this year’s crop remains frozen in the ground.

And then, more bad news: Farmers now have to pay their cooperatives for the beets they were unable to harvest.

“This is far and away the worst [year], as far as beets left in the field,” said Dan Younggren, who has raised sugarbeets near Hallock, Minn., for about 40 years.

Younggren was one of many of the 2,800 members of the Moorhead-based American Crystal Sugar cooperative who were forced to leave beets in the ground to freeze over winter. He’s had to leave 40 percent of his fields un-harvested.

"It's a devastating hit to all of agriculture right now," said Younggren, who is also president of the Red River Valley Sugarbeet Growers Association.

Sugarbeets are different from many other crops grown in Minnesota, in that farmers become members of a cooperative, which processes and markets the crop, returning a payment to farmer-members. The largest sugarbeet co-op in Minnesota is American Crystal Sugar, which planted nearly 390,000 acres of sugar beets this year. About 118,000 of those acres will remain in the ground because fields were too wet this fall for harvest.

It’s been a tough harvest for every crop grown in the region. Farmers fought through mud to harvest crops during a wet fall, and this year’s sugarbeet losses come on top of several years of low crop prices and an ongoing trade war with China.

"This is going to have a tail that's going to last many years, for many people, trying to pull themselves out of this,” said Younggren. “It's going to be some tough skidding, no doubt."

Adding insult to injury, the sugarbeet farmer-members are now required to pay American Crystal Sugar Cooperative for each acre of beets not harvested.

American Crystal Sugar did not respond to a request for information about the harvest, but several growers confirmed that, as part of their contract to grow sugarbeets for the cooperative, they must now pay $343 for every acre they’ve left in the ground.

The money will help cover operating costs for the cooperative’s five sugar processing plants. Normally, the operating costs come from the sale of sugar, but because the cooperative will be processing a third fewer beets this year, farmers need to shoulder the extra cost.

"We're a co-op. Sometimes you thrive together, sometimes you suffer together,” said Younggren. “You have to share in the cost of keeping the company alive, so that's the number they came up with, [and] that's the number we'll live with."

For Younggren, that will mean paying about $170,000 for a crop he didn't harvest, in addition to the money he spent growing the crop he didn’t harvest. Part of that loss will be covered by insurance.

Sugarbeets are cooked and processed into sugar, molasses and pulp used for livestock feed. Beets account for more than half of the eight million tons of sugar produced in the U.S. every year, and sold in stores or used in food production. Sixty percent of U.S. sugarbeets are grown in Minnesota and North Dakota.

Three sugar-producing cooperatives run the sugarbeet industry in the region around western Minnesota and eastern North Dakota. American Crystal is the largest. Minn-Dak Farmers Cooperative, based in Wahpeton, N.D., and Southern Minnesota Beet Sugar Cooperative, based in Renville, Minn., each have about 500 grower-members.

Minn-Dak Cooperative couldn’t be reached for information about this year’s harvest.

But for the farmers of the Southern Minnesota Beet Sugar Cooperative, whose fields are a couple hundred miles south of the Red River Valley, the harvest went more smoothly. They were able to harvest 99 percent of their crop.

“We’re feeling very fortunate, compared to some of our friends to the north,” said the co-op’s vice president for agriculture, Todd Geselius.

But even in southern Minnesota, the harvest wasn’t perfect. While most of the co-op’s sugarbeets were harvested, a wet spring delayed planting, which meant the crop fell short of average in both yield and sugar content, key measures of how much farmers are paid for the crop, said Geselius.

"Chances are it's not going to be a great year -- certainly not good enough to make the kind of payment we would like to make to the growers,” he said.

Sugarbeet farmers in southern Minnesota had a record harvest in 2017, but very wet conditions since then are likely to make this year the second of below-average payments in as many years.

Up north, farmers will likely pivot from harvesters to spreadsheets -- factoring insurance payments for lost crops against the cost of growing the crop -- to better understand the full impact of this year’s late planting season and incomplete harvest.

There may also be payments from a USDA disaster assistance program, but farmers are waiting for more information about that process.

Dan Younggren said he plans to meet with his crop insurance agent and spend some time crunching numbers to grasp the full economic impact of leaving so much of his crop in the field.

"The dust is still flying, as they would say, so as soon as the dust settles, then we'll know,” he said. “You can pencil a loss -- now it's a question of how much of a loss it's going to be."