TWIN FALLS — Not all sugar beet crops are created equal.
Some growers’ sugar beets have a higher sugar content than others. Some crops come in with a lot of dirt; others come in clean. Some have more impurities — unmetabolized nutrients such as nitrogen, phosphate and zinc — than others, and removing dirt and impurities increases production costs.
With so many variables at play, how does Amalgamated Sugar Co. place a value on various sugar beet crops as they are delivered to the company’s three factories?
“There was always a dispute between sugar companies and growers,” said Duane Grant, chairman of Snake River Sugar Co., the grower-owned cooperative that owns Amalgamated and the White Satin Sugar brand. “The U.S. Department of Agriculture stepped in and created a sophisticated formula that accurately calculates the amount of sugar per ton of beets and varying sugar content.”
Amalgamated Sugar negotiated with growers an altered formula to account for specific elements of the Idaho crop. Growers are paid not by sugar content of the beets, but by the amount of sugar actually extracted from their beets, minus the costs of operating Amalgamated’s three factories.
To estimate the value of the crop, Amalgamated looks at various factors in the samples pulled from each truckload of beets it receives. As soon as sugar is processed and stored and sale contracts begin, Amalgamated takes out loans against the value of the crop. It then advances 50 percent of the expected value of beets to growers within 60 days of the end of harvest, based on what the market is expected to bring that year.
The entire cycle from sowing the seed to processing the sugar to the final payment takes about 19 months. Payments are staggered so growers receive five or six payments starting in October or November, with a final payment the following October.
By the end of each January, growers can expect to receive 90 percent of their yearly payment.
Growers received their last payment for the 2015 crop late last month. The average price paid to growers cooperative-wide varies year to year based on factors such as market, crop quality and quantity.
“In general, growers are expected to have been paid about $45 per ton for crop-year 2015 sugar beets when the final payment is made near the end of this month,” Grant wrote in October. “Projected price at this early stage for the 2016 crop is in the $39.50/ton range.”
Average payments per ton in the previous five crop years: 2014, $45.23; 2013, $40.02; 2012, $52; 2011, $65.44; and 2010, $57.32.