American Crystal Sugar projects $71 per ton beet payment – Agweek

MOORHEAD, Minn. — American Crystal Sugar Co. is making a strong initial payment estimate of $71 per ton beet for its 2022 crop, which set a record total volume of 12.1 million ton, company officials told shareholders in meetings across the Red River Valley. It may be a record-high for the first estimate of payments, but comparisons weren’t immediately known.

“Crystal,” based in Moorhead, is a closed cooperative that owns six beet sugar processing factories. It is owned by about 2,600 shareholders. In a separate but related development, brokered sales of the company’s stock recently hit a record-high at $4,800 per share. A share of stock confers the right — and obligation — to produce and market beets through the co-op. In the 2022 crop year, shareholders initially were allowed to plant acres equivalent to 76% to 83% of their owned shares.

Co-op officials updated shareholders in annual factory “district” grower and lender meetings. More details will be discussed in the company’s annual meeting on Dec. 1, 2022, in Fargo.

Tom Astrup, president and chief executive, confirmed the figures and said the program was “very resilient.”

“The per-ton payment is a nice number, historically,” Astrup said. “The tons per acre were down and it’s also important to remember that costs on the farm are up 15% to 20%. It’s important for people to understand the inflation that’s going on on the farm these day.”

To compare, American Crystal in November 2021 projected a $60 per ton payment for the 2021 crop. The company can adjust those payments in the following spring and fall. The company did not adjust the payment in the spring of 2022. Two weeks prior to the factory district meetings, the co-op increased the final 2021 crop payment to a final figure of $64.98 per ton. The to compare, the all-time record-high payment was $73 per ton for the 2010 crop.

In the 2022 factory district meetings, Astrup detailed factors that figured into the strong 2022 crop payment projection. (The last of the meetings, scheduled Nov. 10, 2022, in East Grand Forks, Minnesota, was held virtually because of a blizzard.)

On the supply side, Crystal’s 2022 crop turned out stronger than expected, averaging 26.5 tons per acre which is less than the 30 ton-per-acre expecations. The company started stockpile harvest five days later than expected, which added tons and sugar content to the unharvested beets, especially with the sunny, cool October that occurred this year. Sugar content ended up at 18.5% which is better than the 18% average.

Shareholders started with a late, wet spring, followed by wind damage and flooding. The co-op activated its so-called “TAP” (Targeted Acre Program) which allows some willing growers to add more acres in the case of late planting or other planting problems. The company added 52,000 acres to plantings to compensate for the late planting.

The 12.1 million ton crop, which is a record by 100,000 ton, is at the high end of the range of what the company is able to process. The company typically projects a processing or “slice campaign” to run into middle May.

Typically, the northern, Drayton, North Dakota, factory district is known for having higher sugar content and lower tons per acre yield. This year, however, northern district had more rainfall and so had lower sugar content.

Among the “pluses” for the year is Sept. 14, 2022, completion of a four-year labor contract with the Bakery, Confectionery, Tobacco Workers, and Grain Millers Union.

Jayson Menke, a broker with Acres & Shares, one of three companies brokering Crystal beet stock, said one sale of 99 Crystal shares in the first week of November 2022 went for $4,800 per share. As of Nov. 10, 2022, another broker offering 50 shares listed at $4,800 per share.

The share selling season is typically early fall to spring. Menke said this year’s first sales started in early September and have ranged from $4,300 per share to $4,800 per share. Prior to the $4,800 per share sale, a couple of transactions had been made at $4,700 per share.

To compare, in the previous marketing season, 4,375 shares were sold, averaging $4,217 per share. The market peaked at $4,650 after the co-p’s price projections were announced in November 2021.