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Published December 12, 2011, 05:28 PM

Smaller, but still solid crop

Minn-Dak Farmers Cooperative of Wahpeton, N.D., is processing a disappointing crop, but still a solid contributor to the farming operations for some 476 growers.

By: Mikkel Pates, Agweek

FARGO, N.D. — Minn-Dak Farmers Cooperative of Wahpeton, N.D., is processing a disappointing crop, but still a solid contributor to the farming operations for some 476 growers.

At the co-op’s 38th annual meeting in Fargo, N.D., President and Chief Executive David Roche talked about the impacts of a reduced crop. The 2011 crop year averaged 16.2 tons per acre, down from the 27.1-ton bumper crop in 2010 and the 20.7 ton crop in 2009.

The payment per ton on the 2011 crop is projected with a “starting point” of just more than $64 per ton, up from the 2010 final payment of $58.10 per ton, but last year’s payment was on a much larger crop.

Minn-Dak projects a total gross payment to about $126.3 million. So the total payment is down from the record $180.6 million from the 2010 crop, but up from the $95.1 million crop in 2009, Roche says.

“We’re down a third in the payment in the growers, but still respectable in the payments per ton,” Roche says. “Unfortunately, we had a wide range — growers with 5-ton yields and growers with 25-ton yields. So some growers did very well, depending on the geography of where they lived.”

Industry matters

American Crystal Sugar Co.’s labor dispute in the central and northern Red River Valley is grabbing sugar industry headlines in the Red River Valley this year, but there are other topics. Minn-Dak, which secured a labor deal last summer, focused its messages on passing a new farm bill and the future of Roundup Ready sugar beet deregulation.

The co-op has asked grower-shareholders to submit comments to the Animal and Plant Health Inspection Service, which is completing Environmental Impact Statement, due Dec. 13.

“I think there’ll kind of be a flurry that comes in at the end,” Etten says.

Beet growers in the region expect to plant glyphosate-ready beets in 2012, but are to secure regulatory approval to grow seed with the technology in 2013 and beyond. Roche estimated that if not for Roundup Ready technology in 2011, more than 20,0000 acres would not have been harvested because of heavy rainfall in June and July.

Still, Roche says the company undertook a “juice softening project” to improve efficiency and is “considering the addition of molasses desugaring capabilities, as we are the only beet processing cooperative without such capacity, and we believe the potential returns can be attractive to our shareholders,” he says.

The co-op lost significant portions of its crops to wet weather in 2008 and 2009, and has invested in factory improvements to cope with muddy conditions — mud presses, clarifier capacities and waste water.

Doug Etten, the co-op’s board chairman, says he expects that the U.S. sugar program can be maintained, despite the rancor from the labor lockout at American Crystal Sugar Co.

Minn-Dak replaced a six-year contract with a two-year contract in June, without the impasse experienced at Crystal. While Sen. Kent Conrad, D-N.D., and others have suggested the lockout is not helpful in maintaining the sugar program, Etten says crystal accounts for 450,000 acres in a U.S. beet industry that ranges from 1.2 million to 1.5 million acres. And that doesn’t count sugar cane plants, which also have contracts.

“It’s a localized concern, and you don’t hear concerns from, say, a Michigan,” (grower) Etten says.

Minn-Dak and Crystal market sugar and other byproducts together, and they both deal with the same Bakery, Confectionery, Tobacco Workers and Grain Millers union, but with separate contracts. The contracts are not identical. Minn-Dak is a newer organization than Crystal, and the contracts aren’t identical.

Other issues being addressed by the co-op:

n Weed resistance. Etten says this is more on a national scale, and more in the Cotton Belt. “We’re urging our growers, through chemical family rotations, to use different families of chemicals on their corn or beans, and try to reserve the Roundup-only for the beet crop. And I think our growers are taking that seriously, because it is a serious issue.”

n Crop insurance. Growers have been interested in a revenue-type product for a number of years but haven’t made headway with the USDA’s Risk Management Agency. Roche says he’s happy that the insured value of beets increased this year, putting it “closer to the marketplace.”

n Mexican sugar. It’s a concern because the international neighbor supplied 15 percent of U.S. sugar markets last year. In effect, we have a unified North American sugar market — one where our total supply and price is impacted significantly by decisions of Mexican sugar mills as to whether they should export to the United States or sell their product domestically in Mexico,” Roche says.

n Minn-Dak established a position of research agronomist, naming Mike Metzger to the post. Etten says the post will help shareholders capitalized on new technology and crop management tools.

n Demand. Some experts bullish on sugar demand vs. supply fundamentals for the next 15 to 18 years. “That’s heartening,” Roche says.