Officials: Big beets for Billings
HARDIN, Mont. -- Western Sugar Cooperative is going to have a big crop this year, and the biggest part of it will be in the Billings, Mont., production area.
HARDIN, Mont. - Western Sugar Cooperative is going to have a big crop this year, and the biggest part of it will be in the Billings, Mont., production area.
“We have a very respectable crop coming across Western Sugar,” said J. Kent Wimmer, longtime director of shareholder relations and government affairs for the co-op, based in Denver. Western Sugar is the only beet sugar company in the country with all of its production under irrigation.
“The projected average would be 32 tons per acre, which would be a record for the cooperative,” Wimmer said. “A lot driving it is that Montana crop, the potential for a record. They’re looking at 38.5 tons up there right now, and it could be better than that if the weather continues to progress like it is.”
Montana Western Sugar growers raise about 25,000 acres of sugar beets in six counties. About 9,000 acres are in Big Horn County. Western Sugar, based in Denver has factories in Billings, Lovell and Torrington in Wyoming, Scottsbluff, Neb., and Fort Morgan, Colo.
Western Sugar markets about 10 million hundredweight of sugar each year under its Great Western retail brand name, a small percentage of its production. About 25 percent of the company’s product goes into consumer packages, while another 25 percent is in industrial bags and 50 percent in industrial bulk. The company represents about 5 percent of the U.S. sugar market and about 10 percent of the beet sugar market.
A family affair
Western Sugar has about 1,000 active shareholders involving 750 farming operations, spread across four states. About 200 shareholders are in the Billings area.
Shawn Nedens is a typical shareholder. Nedens farms near Hardin with his brother, Carl, and three nephews - Brett and Chris Nedens, and Michael Savage. The Nedens have been in the area since the 1960s, always raising sugar beets. Shawn was the youngest of four children. Three sons - Roger, Carl and Shawn - all went into farming, operating separately but in association.
Roger, who died in 2008, helped get Rocky Mountain Sugar Growers Cooperative formed in 2001, and was involved in its transformation to Western Sugar in 2002.
“We’re sugar beet farmers, and we had to invest in it,” said Shawn Nedens, a director for the American Sugarbeet Growers Association since 2009.
Back in the 1990s, the Nedens family raised only 600 acres of sugar beets. This year, they collectively raise 2,000 acres, accounting for a good share of about 8,000 acres of beets grown in Big Horn County, all for the Western Sugar Cooperative.
In Big Horn County, home to the famous Little Bighorn Battlefield National Monument from 1876, sugar has an important history.
Holly Sugar built a plant there in 1937 and it operated until 1971. After that, growers raised beets for a Billings plant, built by Great Western Sugar Co. and later owned by British company Tate & Lyle, which ran it through 2001 when growers in Western Sugar Cooperative took over, finalizing the purchase in 2002.
Individual shareholders own patron preferred shares, which entitle and obligate the grower to raise an acre of beets for each share.
Western Sugar has a different pay system than American Crystal Sugar Co. in the Red River Valley of eastern North Dakota and western Minnesota. American Crystal pays out on a net proceeds system. Western Sugar pays an initial payment, based on 70 percent of a $24.50 per hundredweight sugar net selling price.
“The rest depends on how they get the sugar sold,” Shawn Nedens said. “The final three payments are 10, 10 and 10 (percent).”
Wimmer said the final payment comes in October of the year following the crop.
While there are always production challenges, Shawn Nedens said one of the most immediate threats facing beet growers is the influx of subsidized Mexican sugar and other factors that caused the price to plummet in 2013. Western Sugar is the first listed among companies in an alliance pressing for trade judgments to confirm the Mexican government is unfairly subsidizing and dumping sugar in the U.S. market.
Almost all the co-op’s farmers grew their beets in 2014, despite poor 2013 financial results. The co-op charges shareholders a $385-per-acre penalty fine if they choose not to grow and deliver beets to the company, according to their share agreement.
Shawn Nedens is optimistic about a solution to the problems with Mexico. He sees it as “primarily a communication issue” between the U.S. and the Mexican governments over what they’re going to export into the U.S.