Spring planting nears: Sugar beet farmers forging ahead, despite price drop, water concerns
March 27, 2013
Heading into this planting season, sugar beet growers face an issue other farmers don't — a nearly 40 percent drop in the price of their commodity.
A surge of sugar imports and abundant harvests last year in some regions — like northeast Colorado, where many farmers saw record-high yields — has led to too much supply in the U.S. The price of sugar now has fallen by 38 percent since April, according to Associated Press figures.
Price decline aside, farmers in the South Platte River Basin, where the bulk of sugar beets are grown in this region, are already facing the quandary of possible water shortages as they inch closer to planting time.
Sugar beet seeds typically hit the soil in early- to mid-April.
However, there's little local farmers can do to combat the price problem as planting draws near, they say.
Fortunately, they added, sugar-beet production has been profitable in recent years, which will help cushion any blow in the future if profits are limited.
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Most farmers who grow sugar beets in Colorado, Wyoming, Montana and western Nebraska do so through the Western Sugar Cooperative, headquartered in Denver, Colo.
As part of their contracts with the cooperative, farmers agree to plant a certain amount of beets each year.
In most cases, farmers can decide to plant less of a certain crop if the commodity price declines, but Western Sugar's beet growers don't have that luxury, because of those contacts.
Also, as the price of sugar has during the last year, the input costs to grow beets have stayed steady, farmers say.
"It's definitely a concern," said Joe Amen, a Hudson, Colo., area sugar beet grower, referring to the sugar-price drop off. "Not much you can do, though. There's too much sugar out there. It's that simple.
"It's just a thing the U.S. is going to have to consume its way out of to improve the situation."
Amen added, though, that he'd like to see the U.S. Department of Agriculture help with the oversupply of sugar to speed up the price-recovery process — since it's their trade policies that led to the overabundance in the first place.
Kent Wimmer, director of shareholder relations at the Wester Sugar Cooperative, described this year's sugar-price drop as "unusually sharp," but said fluctuations in prices are nothing new.
He added that Western Sugar continually adjusts its acreage allocations for its farmers heading into the planting season, basing those adjustments on the availability of water, market prices and many other factors.
With an oversupply of sugar in the U.S. and water possibly limited, Wimmer said Western Sugar, as of now, is having its farmers/shareholders plant slightly fewer acres than in previous years.
He noted that, regardless of certain factors, Western Sugar still needs its farmers to produce enough beets to keep its sugar-processing plants operating profitably.
Many farmers who grow sugar beets also grow other crops, like corn or wheat — crops that haven't seen a decline in price. That will help farmers remain profitable overall while sugar prices lull.
And, while farmers agree to grow a certain amount of beets for Western Sugar each year, Amen noted there's an "act of God" clause in their contracts to help farmers — in case water isn't available, weather goes south and farmers' harvests are limited.
He said farmers might have to fall back on that this year.
Snowpack in the South Platte basin was only 67 percent of historic average this week, according to the Natural Resources Conservation Service.
Because of the drought that's plagued the region for months, reservoirs in the South Platte basin were only filled to 82 percent of historic average at the beginning of March, according to NRCS figures.
Statewide, two-thirds of the state's top soil was "short" or "very short" on moisture, according to a report from the U.S. Department of Agriculture released March 18 and 89 percent of the state's subsoil was short or very short on moisture.
However, some in the South Platte basin are fairing better than others across the state when it comes to moisture.
Through March 20, Greeley — in the heart of Weld County, where more than two-thirds of the Colorado's sugar beets are produced — has received about 11 percent more precipitation than average so far in 2013.
However, for the entire snow year, dating back to October, Greeley is still about 18 percent behind normal.
"Just pray for rain," Amen said. "That's about all there is to do." ❖