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Published November 09, 2011, 08:34 AM

American Crystal Sugar Co. sets record for 2010 sugar beet payments

MOORHEAD – American Crystal Sugar Co. is breaking a record when it set its final payment for the 2010 sugar beet crop at $73.02 per ton gross.

By: Mikkel Pates, Agweek

MOORHEAD – American Crystal Sugar Co. is breaking a record when it set its final payment for the 2010 sugar beet crop at $73.02 per ton gross.

With on a harvest of 10.9 million ton, that’s a gross payment of $795.9 million.

The projection last March was for $63 per ton projection. The higher prices are buoyed by strong sugar prices and better beet sugar content, the company said in annual shareholder district meetings this week.

The current projection is $59 per ton gross for the 2011 crop, which totals 9.2 million tons. If realized, that would be a gross payment of $543 million.

The 2009 crop payment was $52.87 per ton gross. The all-time record was the 1974 crop payment, at $57.14 per ton.

The cost of growing sugar beets has also climbed in the past few years. Prices of American Crystal beet share stock have increased to cases of $3,700 or more, for the right and obligation to market beets through the cooperative.

In related Crystal issues:

* Bill Murphy, administrator of the U.S. Department of Agriculture’s Risk Management Agency, which is in charge of federally subsidized crop insurance, told the “2012 Farm Bill: Issues and Challenges” conference in Fargo that his agency is evaluating the prospect of providing revenue-based crop insurance coverage for sugar beets, as well as dry edible beans and other crops.

* Kevin Price, Crystal’s director of government affairs, told the conference he believed sugar provisions in the 2012 farm bill could be defended, despite the ongoing lockout of Bakery, Confectionery, Tobacco Workers and Grain Millers union workers, who have twice rejected a Crystal contract offer.

* Brian Ingulsrud, vice president of administration, told Agweek that growers in the factory meetings have been supportive of the company’s position in its labor negotiations. Ingulsrud says the company is willing to reopen negotiations if there are significant changes in positions, but said no such negotiations are scheduled.

* John Riskey, local president and business manager for the union’s local that represents East Grand Forks, Drayton and Moorhead workers, on Nov. 8 forwarded to the news media a notification of a Securities and Exchange Commission filing.

The SEC filing showed that Joe Talley, Crystal’s chief operating officer had signed an agreement on July 15 that requires Crystal to pay him a severance payment equal to one year of his salary, if the company should terminate him before Aug. 13, 2012, and receive a “prorated portion of any incentive awards that would otherwise have been paid and/or awarded to him under the Company’s long-term and short-term incentive plans.” But if Talley should resign prior to that date the company would not pay that severance.

“He got a great golden parachute,” said Mark Froemke, an AFL-CIO of Minnesota official and on-leave American Crystal worker who has been involved in the contract negotiations. “I obviously don’t know what goes through Crystal sugar’s thought patterns,” Froemke said. “I don’t know what it means. It was interesting the date that he signed that. I think that means that he obviously insulated himself very well if he was forced out of his position.”

Ingulsrud said severance packages for people of Talley’s position are “very common” in the industry, and at his level. He confirmed that Crystal President David Berg has a similar agreement in place.

“I don’t think it’s that big a deal,” Ingulsrud said, saying the union is “grasping at straws” in attempt to make the company look bad.