Sidney Sugars to close doors, beet farmers ponder future
The Steinbeisser Family has a 90-year history of raising sugar beets in Sidney, Montana. However, the notice on February 6, that the Sidney Sugars plant was closing came as no surprise to the farmers. They had seen the writing on the wall since American Crystal bought the Holly Sugars Plant about 18 years ago.
“Holly Sugars had a lot of pride in how the plant ran, and they were continually making improvements to make a bigger, better-run factory,” said Don Steinbeisser, Jr. “Almost instantly, when American Crystal took over, that progressive work stopped. American Crystal kept cutting back and cutting back, and the factory kept getting slower and slower.”
The Sidney farmer feels the American Crystal’s plan the entire time was to take beets away from Sidney and take them back to the Red River Valley, where they have four factories in North Dakota and Minnesota.
According to American Crystal, the company closed the factory due to increasingly smaller numbers of sugar beets being planted. They noted that due to an ongoing insufficient supply of sugar beets from the local growers, it has become financially unsustainable to continue operating the nearly 100-year-old business. In the 1990s, contracts for sugar beets with the local growers had reached as many as 45,000 acres.
“Last year, there were only 18,400 acres contracted. The year before that, 30,774. With only 19,500 acres of sugar beets offered in the region for this coming spring, the Sidney operation is simply unprofitable,” said Steve Rosenau, American Crystal Sugar Company Vice President of Agriculture and Chief Operating Officer of Sidney Sugars, Inc.
Sugar beet farmers get paid so much per ton due to the percentage of sugar minus pile loss and a few other things. They get paid on the percent by the ton, and then sugar is sold by hundred-weight. However, the Sidney-area sugar beet growers say that every time they renegotiated the contract, the company would cut the amount paid for the sugar beets.
“They kept dropping how much we’d get paid,” Steinbeisser explained. “The American Crystal Management treated us like serfs, and we had to do what they wanted.”
The Steinbeissers did not plant sugar beets at all in 2022. “People quit planting sugar beets because they were not making money. You cannot have the price you’re getting cut for three years in a row. With sugar beets, the cost of production is so high you must generate a lot of dollars. The guys in Terry, Fallon, and Miles City started cutting their acres because they were not making any money. Tonnage was staying up due to new varieties, but last years’ beet crops haven’t been good.”
He sympathizes with the factory employees and the county that will lose the essential tax revenue. “I know it will be painful for everyone, especially the factory workers who are losing their jobs. Hopefully, we can find something to replace it. I know it can’t be done instantly, of course.”
American Crystal said that while processing the 2022 crop was completed in December, cleanup work will continue in the factory until April. Warehouse operations will continue through the summer. The factory has typically employed a total of 300 employees. “Employees will receive severance packages, and we have provided a number of resources to assist them with job searches, including offering opportunities to join other American Crystal factories in the Red River Valley,” said Rosenau.
The District 6 Montana Farm Bureau Director has a few ideas for farmers. “If you have your ground ready for beets, you can plant corn because corn uses the same fertilizer and other inputs. Soybeans are a later harvesting crop, so if you don’t have beets planned for this year, you could raise soybeans and get a fair yield. I imagine other farmers will try sunflowers and canola. Our farm has been raising soybeans for 15 years, and today farm has 900 acres of soybeans. We plan to have more alfalfa.”
He noted that even before the factory closing news, area farmers started raising a lot more corn and soybeans, especially with more cattle being fed and ranchers rebuilding their feed lots. “Even though those feedlots won’t have our beet pulp to feed, some guys are talking about raising silage. I also know someone considering a corn-drying facility.”
Steinbiesser shared that local beet farmers proposed to buy the plant several years ago. “We had a price, and we had a deal that in 10 years, American Crystal could repurchase it. We started in the middle, and they decided they didn’t want to sell it. Then they doubled in price to sell, but the amount we had offered was the maximum we could pay. We were talking about the factory’s bad shape and how much more it would cost to modernize it.”
Beet equipment in good shape will be sold to western growers, like those in Idaho, and the trucks and trailers will sell. The older diggers and exfoliators will be more challenging to move.
Steinbeisser points out the silver lining in not raising beets. “Our tractors will run 400 hours less by not raising sugar beets so that they will last longer. We will not need 11 trucks or have to hire a crew for the sugar beet harvest. Some farmers will need to buy combines or share them with their neighbors to start new crops. There is a lot of demand for corn from Billings and especially from Canada, and we are closer to the Canadian feedlots than Iowa and Nebraska.”
The long-time farmer ponders if a vegetable canning company could replace the sugar beet factory, noting that Montana doesn’t have the water concerns that other states have, so farmers may be able to try their hand with new crops, like sweet corn and edible beans. He sees the advantages of abundant water and minimal housing issues as more than making up for the cost of freighting canned goods back to urban areas.
The one aspect Steinbeisser views as a learning curve is marketing. Farmers who switch from sugar beets to corn, soybeans, and even sunflower seeds must determine how to market and store those crops.
“I see it as a new beginning, and hopefully, we can come out of this with a strong economy. I pray for the best.”