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American Crystal Sugar president and CEO Tom Astrup said about 2,200 acres of hte company's 390,000 planted didn't get harvested in 2018. Photo taken Dec. 6, 2018, in Fargo, N.D. (Jenny Schlecht/Agweek)

Weather-battered 2018 sugar crop finishes strong; Peterson updates farm bill progress

FARGO, N.D. — There were days in October when Tom Astrup didn't know how the 2018 sugar beet harvest in the Red River Valley was going to end up. Unprecedented cold nights, rainy days and inches of snow were hurting the ability to get beets out of the field and could have ruined much of the crop.

"I can tell you, I was pessimistic," Astrup, president and CEO of American Crystal Sugar, said during his speech to the Joint Annual Meeting of American Crystal Sugar Company and the Red River Valley Sugarbeet Growers Association.

The next week's weather was critical in getting out what Astrup called a "pretty darn good 2018 crop." Still, the crop didn't approach the two prior years' crops, and 2,200 acres out of 390,000 planted didn't get pulled out of the ground.

"It's painful for those who had to leave them behind," he said.

Yields for 2018 were 28.9 tons per acre, compared to 30.2 tons per acre in 2017, which was second only to 2016's record crop. Sugar content for 2018 is expected to be 18.14 percent, comparable both to 2017 and the historical average.

Astrup explained that the sugar content and yield were lower than looked possible during the summer. But a cool September, along with the stress of the October cold, rain and snow, seem likely to have capped the beets' potential. Astrup said really cold weather now, which would allow the beets to freeze and keep the company processing into May, would help the prospects.

The public portion of the annual meeting started off with a welcome from Dan Younggren, president of the Red River Valley Sugarbeet Growers Association, and Curt Knutson, chairman of the American Crystal Sugar board of directors. Younggren and Knutson, in a joint address, stressed the importance of trying to be the best and trying to improve.

The goal of American Crystal Sugar is "to be the best beet sugar company in the world," Knutson said. That's the company's new vision statement and served as the theme for the convention.

Astrup said much thought went into the new vision statement and a mission statement, based on service to family farms, employees, customers and shareholders.

Matt Wineinger, president of United Sugars Corporation, spoke about what his company does, explaining that United Sugars' purpose is to "Sell it high! Sell it all!" American Crystal Sugar is one of four companies that work with United Sugars Corporation to sell sugar.

Wineinger showed a heat map of where United Sugars' products go, with a oval stretching across much of the Midwest and into Florida. Chicago is the main focus, Wineinger said, explaining that the company's "sugar dome" in the Windy City plays a part in that. Chicago, he said, is the top metropolitan sugar market, and having a strong presence there is good for business.

Astrup, meeting later with media, concurred, saying it's cost-effective to ship to Chicago.

"It's just an arrangement our customers have found much to their liking."

Astrup also touched briefly on the new Big Sky Sugar Cooperative that have signed a non-binding letter of intent to purchase American Crystal Sugar's Sidney, Mont., processing facility. While negotiations have a long way to go, Astrup said he is hoping the deal can be closed before spring planting.

Astrup said the growers in Sidney have not been part of American Crystal Sugar and have instead been contract growers who negotiate prices with the cooperative. Forming their own cooperative and owning the Sidney facility would be a positive step for growers there and for the community of Sidney, Asrup said.

"It's a good plant," he said. "I think it's got a great future."

Farm bill expected next week

Rep. Collin PetersonAstrup is optimistic about the upcoming farm bill.

"What we're hearing is that the sugar program is in good shape," he said.

Rep. elect Kelly Armstrong, R-N.D., and Rep. Collin Peterson, D-Minn., also spoke at the meeting.

Peterson, who is likely to become the House Agriculture Committee chair with the Democratic majority voted in at the November election, said the farm bill was delayed by the death of former President George H.W. Bush and now may be further delayed by an approaching snowstorm. Once the bill is complete, half the conference committee conferees have to sign onto it. Peterson estimated the bill will make it to the House floor on Thursday, Dec. 13. If it passes, it will go onto the Senate and then the President.

Peterson explained the behind-the-scenes machinations involved in getting the bill completed, including conversations and debates on Supplemental Nutrition Assistance Program and forestry programs. Peterson said he was able to get the House SNAP changes removed from the final bill.

"The Republican party has done something I have never been able to do: To make me a hero with the Democratic party," Peterson said. "They give me credit for straightening out food stamps."

Peterson said that gave him leverage to get votes to kill an amendment that would have harmed the sugar program.

Peterson said this has been the most challenging time in his tenure in Congress and he called it "somewhat of a minor miracle that we got this thing done" due to partisan battles and gridlock.

Rep.-elect Kelly ArmstrongAstrup is optimistic about the bill.

"What we're hearing is that the sugar program is in good shape," he said.

Armstrong hopes the new bill will be a done deal before he is in office on Jan. 3.

"It's important, now more than ever," he said.

On the trade front, Astrup doesn't think the U.S.-Mexico-Canada Agreement, which would replace the North American Free Trade Agreement, will be a detriment to U.S. sugar. A trade and anti-dumping agreement with Mexico already solved many problems, and "the new NAFTA won't change that," he said.

The new deal, which still has to be approved by Congress, would give Canada a small additional sugar quota into the U.S. However, Astrup said Canada is a net importer of sugar.

"The volume is small enough that we don't expect to oppose it," he said.

Armstrong said he is optimistic about the various trade deals and negotiations ongoing with the Trump administration; however, he indicated a willingness to push the administration if agriculture producers are being harmed.

"I'm optimistic though not naive on those issues," he said.

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