It is a trying time for agriculture. For the sugar beet farmers in the industry in Southern Alberta, they will be led by someone who has a lot of experience

Gary Tokariuk is the new President of the Alberta Sugar Beet Growers Association. 

Tokariuk is the third generation to run his family farm, which started in 1928 and progressed to growing sugar beets in 1949. He himself has been running the farm since his father passed away in 1986.

“Both my wife and I have degrees in agriculture, so we’ve worked hard to keep that in the family,” Tokariuk says. “We’re farming seven quarters right now on the farm.”

His daughter, Tokariuk says, shares the family passion for farming and has a degree in agriculture that helps her in her work as a field person for Lantic Sugar, so he hopes to pass the responsibility on to her once he retires. Tokariuk also has a son who has graduated from the University of Lethbridge with a degree in Education and twin boys, one of whom is a mechanical engineer while the other is a physicist.

Before becoming president of ASBG, Tokariuk worked as a director for Division One of the St. Mary’s Irrigation District and being a part of his local sugar beet board. His previous experience with ASBG, Tokariuk says, began in 1999 following the expansion of the plant and his roles included being on the board until 2005 and serving as Vice-President. Tokariuk admits to truly having his hands in everything he can over the years.

“My dad's philosophy was if you don't get involved, you can't complain,” Tokariuk says. “I'm not a complainer, but when we were at the annual meeting and I gave my speech, I talked about the past and my experiences. The final keynote speaker then basically came out and said, “Don't worry about the past; the past is past.”

Tokariuk, however, believes that one must know and acknowledge where they’ve been to know their destination. “I actually had considered running for President back in 2005 when I was done serving on the board, but we had a sunset clause and I had a young family to think of, so I didn’t know if I could commit to it,” Tokariuk says. “At this point in my life, however, I have good health and I sold my cattle to my daughter. I have time to work on this now and I want to see the industry thrive and survive.”

At the first meeting he attended as president, Tokariuk says, he quickly noticed places where he could contribute. Tokariuk admits that the downside of the meeting was the fact that it had to be a phone meeting due to the COVID-19 crisis, as he prefers in-person meetings and interactions. 

“When Arnie decided to step down, I thought it was another challenge that I was up for, but I didn't realize we have to negotiate a contract and have all this COVID-19 stuff show up all at once,” Tokariuk says. “I don't think anybody anticipated it would be that fast and so disruptive to people's lives.” 

Tokariuk says that with the problems caused by COVID-19 increasing every day, concerned farmers have been calling him and are wondering if it is even worth it to plant a crop this year, as the crops will go to waste if factories shut down. Fortunately, Tokariuk says, ASBG got told by the government that sugar and flour mills are considered essential services and are not shutting down. Having sugar and flour mills considered essential services, Tokariuk says, is a relief after last year’s crop was poor and cut short due to storms. Everyone, Tokariuk says, is worried about planting this year’s crop and then having the plant shut down without accepting beets, but that fear has been alleviated for the moment. 

“You really have to hand it to Lantic, as they are being very cautious about the situation,” Tokariuk says. “People have to get their temperature taken every time they go on their shift and they split shifts so there’s not a whole bunch of people in the plant at a time. They're doing their bit and I'm pretty comfortable that we'll process the crop and have no problems there.”

Harvesting is still a long way off, Tokariuk says, but it is very expensive to plant a crop of sugar beets and ultimately not be able to harvest them. Last year’s crop was very well insured, Tokariuk says, but the loss of a second crop in a row would be very traumatic for a lot of farmers.

“We have a good industry development committee and they've got quite a few irons in the fire and it's a really good chord that we work with there,” Tokariuk said. “Everybody seems to have their niche, which contributes to the board and it's a very strong board. I’m impressed with it and I truly enjoy being a part of it. It's still a pretty good thriving industry, so I just want to make sure that that continues.”  

LETHBRIDGE, ALTA. -- The Canadian Federation of Agriculture says extraordinary times like the one the world is currently experiencing call for extraordinary measures to ensure Canada’s food supply remains safe.  The CFA is calling on the federal government to create an emergency fund to help farmers overcome mounting costs, stemming from the COVID-19 pandemic.

Coaldale farmer Gary Tokariuk said in 35 years of farming, he never imagined a scenario where things would be changing so rapidly. “You think you’re immune to situations like this, and it's impacting everything - and everybody," he said.

Tokariuk,  president of the Alberta Sugar Beet Growers Marketing Board, said sugar beet acreage is being increased this year, but seeding has been delayed by the cool wet weather.  He still has beets in the ground after a heavy snowfall brought last year's harvest to a screeching halt.

The CFA said while spring is normally a time of optimism and promise, this year there is alarming uncertainty in the markets, and concerns about finding labour to hire for planting and harvesting.

“We don’t mean to create panic,” said CFA President Mary Robinson, “At the same time it would be irresponsible not to sound the alarm about the realities Canadian farmers are facing.”

The federation said without immediate and meaningful assistance from the federal government, the agriculture sector can’t ensure the domestic food supply will remain secure.

Robinson said agriculture is at a tipping point, “If Canada doesn’t address the rising challenges immediately, Canadian consumers could see a decrease in the amount and variety of food at their local grocery stores, as well as higher prices in the months ahead."

Farm labour, already a critical issue before the pandemic, has now escalated for farmers who rely on the Temporary Foreign Workers Program to get enough help.

Potato Growers of Alberta President Terrance Hochstein said a lot of their producers rela on those temporary workers, “It has been a really big struggle from the countries they come from, getting that all coordinated, getting it in order.”

The CFA said farmers are dealing with significantly increased costs associated with purchasing the necessary PPE for their workers. In addition, due to meat processing plant closures, farmers are being forced to keep and feed their livestock for an extended period of time.

Robinson said producers need government help to overcome the rising and unexpected costs, “Canadian farmers need to hear a clear commitment from government to instill necessary confidence for the 2020 planting season.”

An organization representing food, beverage and product manufactures is supporting the call for emergency action.  Michael Graydon, President/CEO of the Food and Consumer Products of Canada said smooth running farm operations are key to maintaining steady supplies of affordable food, “We rely on Canada’s farmers and farm workers as the first link in the supply chain that will feed Canada through the coming difficult months.”

FCPC is a voice for about 6500 manufacturers, who purchase 40 per cent of Canada’s agricultural production, and sell over 60 per cent of its output to Canadian grocery stores and restaurants.

Tokariuk said the uncertainty is one of the hardest things to deal with, but adds that’s always been the nature of the business. “You put a crop in or raise cattle and you really don’t know what you’re going to get out of it in the end. We’re at the mercy of world markets, and weather, and now COVID-19.”

Cold temperatures, high wind, and even some upper peninsula snow kept Michigan farmers out of the fields for much of last week.  USDA reporters say there were just over three days suitable for fieldwork, and some farmers in the lower peninsula were able to apply manure and fertilizer.

Michigan led the nation in sugarbeet planting last week, but the freezing temperatures in some areas have some producers replanting.  Soil temperatures were too low to begin soybean and corn planting and slowed growth for winter wheat, barley, alfalfa, and oats.

Thirteen percent of Michigan’s winter wheat is jointing.  Twenty-one percent of the oats, 41% of sugarbeets, and 1% of barley are planted.  About 5% of sugarbeets have emerged.

Fruit producers also dealt with a mid-week hard freeze as southeastern apples were just beginning to break dormancy.  Tart cherry buds are starting to swell, blueberry flower buds are opening.

Michigan topsoil moisture is 64% adequate and 32% surplus, while subsoil moisture is 54% adequate and 44% surplus.

“The relief was tremendously helpful,” Astrup said. American Crystal received $82 million, which was part of $285 million nationally for sugar companies, after a crop disaster in 2019.

The program allocated funds to farmers with the cooperative at a rate of about $207 per planted acre in 2019. About 30% of the co-op’s acreage went unharvested in 2019, in part because of wet conditions in September and then untimely freezing and snow in October.

Usually, farm harvest losses tend to be compensated on the farm that had crop losses, but in a cooperative, all members suffer losses when some members can’t harvest, Astrup noted. Those who harvested “were harmed as much, sometimes more” than those who couldn’t harvest, he said.

Astrup said there are “a lot of ways we could have done it,” but he thinks the method was “generally well-received,” and decided on by the board of directors, who are farmer-shareholders geographically dispersed across the company’s five factory districts, including Moorhead, East Grand Forks and Crookston in Minnesota, and Hillsboro and Drayton in North Dakota.

The co-op started making payments to growers on March 30, and about 97% had been paid out as of April 14. The few left have not filled out applications as yet.

In early April, Crystal’s board approved increasing the projected payment for the 2019 crop to $40 an acre, an 8% increase from the initial projection of $37 per ton. The $40 per ton is applied over 7.5 million tons, or $300 million. The disaster payment accounts for about 27% of the beet payments.

That projection is 27% less per ton compared to a final payment of $54.78 per ton for the 2018 crop, but that crop was 11 million tons, so the payment is about half of the $600 million.

The short crop meant for a short processing season, which ended as early as Feb. 3 at Hillsboro, Feb. 15 in Crookston, Feb. 26 in Moorhead, March 1 in East Grand Forks, and April 5 at Drayton.

Astrup acknowledged that the payment was a new twist in funneling aid through the cooperative, although there had been a similar plan for aid to the Southern Minnesota Beet Sugar Cooperative in Renville, Minn., after 2018 crop losses because of excessively wet conditions.

Astrup credited Sen. John Hoeven, R-N.D.; Rep. Collin Peterson, D-Minn.; and Bill Northey, U.S. undersecretary of agriculture for farm production and conservation, for making it happen.

Astrup said American Crystal so far has been able to operate their processing plants throughout the COVID-19 pandemic, according to the guidance established by the Centers for Disease Control. “The good news is we have a license to operate because we’re in the food industry and customers are still buying sugar,” he said.

Astrup acknowledged that growers of American Crystal Sugar’s wholly-owned subsidiary, Sidney Sugars Inc., at Sidney, Mont., which ended processing on March 4, did not receive disaster funds in the same way as co-op members in the Red River Valley.

Don Steinbeisser, Jr., a director of the said growers in the Montana Dakota Beet Growers Association, have been attempting to apply for disaster funds through “WHIP+” program (Wildfire and Hurricane Indemnity Program Plus), as they would with any other crop. He said he doesn’t have a clue how much that program will provide, but noted that the group is getting back surveys that indicate whether members had crop insurance or didn’t, to help determine compensation.

“We’re working with the RMA (Risk Management Agency) folks back in D.C.,” he said.

Beets that were harvested normally came in at a respectable 31 tons per acre. Farmers hauled beets under a “frozen beet addendum” to their contract, but many didn’t last in storage and had to be hauled out onto fields, at farmer expense. Beets lost more than 1 percentage point of sugar content because of the conditions, he estimates.

Through April 1, 3,892 shares were brokered for an average price of $3,193.60 per share.

“The strength in the beet stock market has surprised most people this year including myself,” says Jayson Menke, owner of Acres & Shares, one of four companies that’s brokered beet stock this season. “After a disastrous harvest campaign which lead to a disappointing fall forecast payment, it’s remarkable that stock has averaged nearly $3,200 per share for the trading season to date.”

Last year 4,085 shares were brokered for an average price of $3,361.81 per share during the 2018 to 2019 trading season. The 2017-18 season had 4,659 shares brokered at an average price of $2,940.23 per share.

“Back in November, I though the wildcard in the market would be how many farmers would need to sell shares because of financial struggles,” Menke says. “While some growers did need to sell shares, through early April there has not been an abundance of shares on the market and there has been adequate demand throughout most of the season lead by optimism in the sugar industry.”

The Western Sugar Cooperative Board of Directors recently voted to increase the assessment — what some growers call a penalty — on co-op farmers who don’t plant their required share of sugar beets.

The increase in the assessment from $380 to $600 per acre furthered frustration among some area growers, who feel trapped between the risk of planting beets that may not turn a profit or paying a penalty if they choose not to grow.

The cooperative was formed in 2002 to save the region’s sugar factories, which were then on the verge of closing — a move that would have effectively ended the sugar beet industry throughout the region. The factories have fixed costs, and to turn a profit, they need growers to deliver a certain amount of beets every year.

Written into the cooperative’s bylaws is an obligation that shareholders, which are the farmers who own the cooperative, grow an acre of beets for every share they own or pay the assessment.

Heather Luther, vice president and general counsel for Western Sugar Cooperative, said the new, $600 per acre assessment more accurately reflects inflation and increases in fixed costs.

“Western Sugar Cooperative’s agreement with its shareholders allows it to impose liquidated damages against any shareholder who does not meet [his] obligations to … fellow shareholders,” Luther explained.

While some farmers feel the assessment was increased to ensure growers plant beets this year, Western Sugar board member Tod Stutzman said that wasn’t the case. He reiterated that the change was an adjustment to reflect increased expenses for the co-op, which all shareholders bear.

“It’s not punitive,” Stutzman said. “It’s actual damages.”

Hard times

Even in retirement, farmers must grow beets or pay the assessment. The only way out of the obligation is to sell their shares, go bankrupt, or die.

While the co-op has paid growers $70 per ton in good years, those payments have fallen considerably. Last year growers received about $17 per ton. They need about $40 per ton to break even. This means shares currently have no value and farmers can’t get rid of them.

David Northrup, who grows beets on the Willwood, said he knows of at least one farmer offering cash to anyone who will take over his shares.

“Not only can you not give them away, you can’t pay people to take them,” Northrup said.

Lyle Evelo, who grows beets near Ralston, said a dozen growers got together for an informal meeting in Burlington in March to discuss the problems as planting season approached. A number of issues came up, including how to improve the quality of the beets that go into the pile and the impacts of the weather. Some of the beet growers — Evelo among them — believe a big part of the cooperative’s financial problems stem from how it’s being managed.

For example, Evelo believes the co-op’s decision to invest in improvements to its factories in Scottsbluff, Nebraska, and Fort Morgan, Colorado, was not a wise move; Northrup agrees it was not a risk the co-op should have taken.

“You can’t gamble that hard and hope it will be OK,” Northrup said.

The debt the cooperative is carrying is hurting the growers’ payments as well, Evelo said.

Each grower typically receives two payments a year and the cooperative takes out $2.50 per ton on each year’s initial payment to finance the company, which is a normal practice in cooperative models. In the past, those payments eventually cycled back to the growers, but they haven’t in several years. Since 2008, Evelo said he’s paid $205,000 in these charges.

“Now, it looks like the company is in a dire financial position. And it doesn’t look like we’ll ever see those again in our lifetime,” he said. 

Evelo and his wife invested $50,000 to buy shares in the cooperative in 2002.

“When we initially signed on with Western Sugar, we were quite aware of the penalty for not planting our beets,” Evelo said. “Those were different times. Our shares could be sold for good value. Quite the opposite now.”

Sustainable business

Evelo said not all sugar beet farmers agree the problem lies with management, nor do they agree on exactly how to fix the problems.

Ric Rodriguez, who is a member of the co-op board and produces beets near Heart Mountain, said the co-op has fallen on rough times, but these are not the result of bad leadership decisions. Rodriguez wasn’t at the Burlington meeting, but he is among those growers who have a different take on what’s caused the co-op to have several lean years.

“We’re following a business model that has been successful in the past, and as of late, we’ve struggled with pricing, production issues, and the weather,” Rodriguez said.

Rodriguez said the goal of the investments in the Scottsbluff and Fort Morgan factories was to lower the cost of processing, and those savings will eventually benefit growers.

Evelo said the quality of the beets here in the northern part of the co-op’s region is much higher, meaning the north is effectively subsidizing operations in Nebraska and Colorado.

However, Rodriguez said a number of factors impact how many bags of sugar you get from a crop, including the sugar content of the beet and the size of the yield. The farmers in Colorado and Nebraska tend to have lower sugar content in their beets but higher yield. It’s just the opposite of the north.

Stutzman characterized the claims that the south has inferior beets as an “urban myth” and argued it’s advantageous to the co-op to have a wide geographic area.

Over time, Rodriguez points out that the co-op was formed in order to sustain the industry, but the way the co-op model works is by sharing not only the benefits reaped when things are good, but also the losses when times aren’t so good.

“The goal of the cooperative is to pay growers as much as possible,” he said.

Evelo also pointed out that other cooperatives, including Wyoming Sugar Cooperative in Worland and American Crystal in the Red River Valley of Minnesota and North Dakota, faced the same weather issues last year that Western Sugar growers faced. Yet, they paid growers more per ton.

Rodriguez said Western Sugar payments have not been that different from the other cooperatives — annual Western Sugar payments have averaged $48 per ton since 2002 — and disagrees that the difference is an indication of a poorly run cooperative. Other factors, such as sugar content of the beets produced, affect how much growers of various cooperatives get paid.

Farming is always at the mercy of events over which growers have no control. That included a damaging freeze last October.

“We just haven’t had any luck with the weather,” Rodriguez said.

He insists that things will turn around. Sugar prices, which caused problems in the past, are much better now, and the market is more stable. With good weather, the payments to growers will go up, and when the improvements to the Scottsbluff and Fort Morgan factories are realized, there will be cost savings as well.

Evelo, however, believes things won’t improve until changes are made in how the cooperative is run. He would like to see two directors added to the board who are not members of the cooperative or beet growers, but have business backgrounds. These outside directors would bring a fresh and objective perspective, he said, providing “guidance as to risk management and good corporate governance practices.”

Evelo also said the cooperative needs a new business plan that operates without imposing penalties on growers — and better protocols for the beets it will buy to ensure a higher quality beet.

Evelo said he and other growers don’t feel the board is being responsive to their concerns.

“I want this co-op to succeed. I don’t want it to fail,” he said. “And it’s difficult in how it’s being managed right now that it is going to succeed.”