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Certified Crop Adviser and Minn-Dak Farmers Cooperative agriculturalist, Cody Wahlstrom, chatted with AgPro to update folks on some of the current key issues within the sugarbeet industry.
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January 8, 2019 at 04:33PM
News and Notes from Minn-Dak Research Agronomist, Mike Metzger
The growing season for Minn-Dak is coming along very well. Our staff took our second round of yield samples last week and turns out we have 26.6 tons out there right now. Sugar content is just shy of 15%, which is actually pretty good for us. The purity is the highest we’ve had in a couple decades for the August sample.
All that put together, the staff’s estimate is 31.1 tons/acre.
Cercospora Leaf Spot:
Cercospora is okay right now. Most guys have four to five applications on. The program is holding very well. Yes, you can find Cercospora out in the field, but it’s not anywhere near economic threshold. We are feeling very good about that.
With slicing going into July, we have delayed our pre-harvest until the latter part of September. Around September 17-18 is when we are looking at putting our first beets on the ground. Stockpile harvest is set to begin at or around October 1.
A loader digs into a 120,000-ton pile of beets that was hard-frozen with ventilation, then covered with insulation, and finally “shrink-wrapped” with plastic. About 1.5 feet of deteriorated beets on the tops of piles insulate the rest, which is frozen to the top. Photo taken June 5, 2018, at Wahpeton, N.D. (Forum News Service/Agweek/Mikkel Pates)
WAHPETON, N.D. — Minn-Dak Farmers Cooperative was supposed to have been done slicing sugar beets June 5, but is expected to continue through the end of the month — perhaps into July. That's due to a large 2017 crop and an expensive equipment breakdown in March.
The company typically tries to size the storage piles for a May 20 end-date. The board projected the longer campaign based on a 9,700-ton-per-day slice to accommodate a 30.5-ton per-acre crop.
Things were going fine until the company's diffusion tower broke down in mid-March, interrupting processing for about 13 days. That was followed by the third-warmest May on record.
A diffusion tower is a key component of the factory that extracts about 85 percent of the sugar and there is only one per factory — no backup. Beet cossettes — slices of beets — go into the bottom of the tower, which is a vessel that is about 35 feet wide and 115 feet tall. It works like a big grain auger, with flighting that slowly lifts the beet pulp up as hot water cascades down, flowing through and removing the sugar. When the pulp comes out the top, it is dried and sold as livestock feed.
When full, the tower holds 3,000 tons of compressed pulp.
"When your diffusion tower fails, your whole factory stops because you don't have a backup diffusion tower," he says. Components in the bottom third of the tower had to be replaced.
BMA, the German manufacturer who made the tower, last summer had done a detailed inspection and concluded it was in good shape. "None of us could have anticipated it," Wickstrom says of the failure. A cause has not been determined.
Wickstrom praised the Minn-Dak staff and the repair teams for getting the piece repaired in 13 days, rather than the 30-day norm. BMA had a technician on-site within 36 hours of the failure.
BMA air-freighted a new set of bottom screens from Germany to fit the factory's unique size. Other equipment was twisted and custom-made at machine shops "from Winnipeg to Minneapolis," Wickstrom said. Two crews of 20 outside contractors were on site 24 hours a day, taking broken pieces out of the tower and putting in new pieces as they arrived.
Wickstrom was "very disappointed that it failed, but we did everything we possibly could to minimize the downside," he says.
About 130,000 tons of beets would have been processed through that down time. Minn-Dak had expected to process 2.56 million tons but now expect to slice 2.43 million to 2.46 million tons.
The good news is the beets are storing better than expected.
In mid-May, a pile at the factory that was simply covered in plastic had about a foot deep of deteriorated beets on the top — "empty carcasses" — and that insulated the beets below. Even after 90-degree days in May, the piles are "frozen to the top," insulated by a slimy layer of 1.5 feet of deteriorated beets on the surface.
The company is working on its final exterior pile and then will go to its three sheds with 80,000 tons each. Minn-Dak for the first time leased "chillers" to keep the beets in those sheds frozen. "We added a chiller system to the middle shed five weeks ago, and when we opened the doors to put the chiller in that shed, there were ice chunks on the floor," Wickstrom says.
"We had a nice cold winter to get them frozen very hard. That's certainly helping us now and paying off," he said.
Some of the cost may be covered by insurance, but final estimates on that won't come until September or October.
Last November, Minn-Dak projected a "conservative" $32.50 per ton for the 2017 crop, based on average quality sugar. The company made an interim payment June 1 based on $30 per ton for average quality beets.
He doesn't anticipate changing that payment from the $30 to $32.50 per ton range, even with the costs of the breakdown. Shareholder costs vary, and most growers can break even or better at $32 a ton, he said.
The two big unknowns are whether the beets will store for 25 to 30 days and how much and how quickly Minn-Dak's insurance company will cover the multi-million dollar repairs. "It's obviously a very large claim," Wickstrom says, but the company insures other beet cooperatives and "we're optimistic they'll be fair."
The delayed slice campaign will mean the company's 2018 crop harvest date will be around Sept. 18. Over the past five years, the harvest at times has started as early as late August.
Typically, harvest starts from the third week in August until mid-September, depending on crop size and development.
The co-op also cut back 2018 acres to 88,000 planted acres, down from 95,000 acres in 2017. That assumes 30-ton per-acre average yield that growers have achieved over the past three years.
American Crystal Sugar Co., based in Moorhead, Minn., completed its slice May 23. They harvested more than 12 million tons, a record, and started processing in their five factories on Aug. 17, "It was a very good storage year," said Brian Ingulsrud, vice president for agriculture. "We had a cooler than normal spring which really helped for good storage of the beets."
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June 12, 2018 at 11:28AM
David H. Roche, retired Minn-Dak Farmers Cooperative president and chief executive, died Dec. 18 at home unexpectedly in Harbor Springs, Mich. He was 70.
Stone Funeral Home at Petoskey, Mich., said Roche was being honored in a private family service with a celebration of life to be held in coming weeks. Memorials are preferred to Harbor Springs Historical Society, 349 E. Main St., Harbor Springs, Mich., 49740 or Little Traverse Conservancy, 3264 Powell Rd., Harbor Springs, Mich., 49740. Condolences and memories can be shared online at www.stonefuneralhomeinc.com
Roche held a bachelor's degree from Saginaw Valley State College and an MBA from Michigan State University. His father was vice president of sales for Michigan Sugar Co.
Roche started his sugar industry career as comptroller for Michigan Sugar Company in 1976, going to Savannah Foods in 1996.
Roche went to Minn-Dak in Wahpeton, N.D., in 2001 and retired in August 2013. The farmer-owned co-op is owned by about 500 shareholders and had about $300 million in annual revenue, selling sugar, pulp and molasses through United Sugars Corp. and Midwest Agri-Commodities Co. While at Minn-Dak they lived at Fergus Falls, Minn.
Patricia Keough-Wilson, a communication executive with Minn-Dak, said Roche was a "great boss. He encouraged, inspired, and held one accountable. ... He loved being a family man. Knowing him was a blessing in my life."
Roche married his high school sweetheart Rae Ann Fierstien in 1970, and they were married 47 years. The couple had three children and four grandchildren.
Roche had many business and civic leadership posts. He was a golfer, Lake Michigan sailer, kayaker and often spoke about his football interest as a "long-suffering Lions fan."
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January 2, 2018 at 12:05PM
Younggren re-elected to third term as Red River Valley Sugarbeet Growers Association President
Minn-Dak Farmers Co-op of Wahpeton, North Dakota held its annual meeting this week at the Fargo Holiday Inn.
FARGO, N.D. — Minn-Dak Farmers Cooperative of Wahpeton, N.D., notched its 45th annual meeting at the Fargo Holiday Inn, celebrating another big crop and payments at profitable levels.
Kurt Wickstrom, Minn-Dak Farmers Cooperative president and CEO, announced $32.50 per ton as an initial payment, "which we hope is conservative," he said. That's "not a great number" but a "pretty significant improvement" over last year, which was bedeviled by processing difficulties.
The co-op's 2017 crop averaged 32.3 tons per harvested acre, compared to 2016 at 32.4 tons. The company reduced planted acres by 17 percent and growers still were asked to leave 5 percent of their beets in the field unharvested.
Growers harvested 30.6 tons per planted acre (with non-harvested acres taken out). The initial payment is designed to produce $1,000 per acre in profits, which should help carry the load when corn and soybean prices are low, he said.
"Quite honestly, they need it," Wickstrom said, noting that grower costs have increased over the years.
Shareholders delivered 2.91 million tons, which is at the outer edge, at 17 percent sugar content, versus 15.7 percent in 2016, and purity at 89.4 percent compared to 88 percent in 2016. The co-op expects to process beets "right until the end of May" in 2018.
"The improvement in sugar content and quality is likely due to the intensive cercospora leaf spot management by growers," he said. The delivered sugar increased 1.25 percentage points because of better disease control. Most growers sprayed four or five times or more.
This is the second year Minn-Dak has exported beet pulp pellets to China as a source for that country's growing dairy industry. Wickstrom discussed a "necessity" to find co-op efficiencies and at the grower level, "assuming soft market prices going forward."
Wickstrom said the co-op over the next several months will ask growers whether they'd accept a system that would incentivize them to produce higher recoverable sugar per ton.
"We can only process so many tons of beets," Wickstrom said. Growers can affect that in various ways, including nutrient management, variety selection and disease control.
Brent Davison of Tintah, Minn., stepped aside after serving 14 years on the board, including the past five as chairman. Davison's father, Earl, had served as the second board chairman at Minn-Dak, which was the first of the beet sugar companies established as a farmer-owned cooperative. Davison, 67, said his most important accomplishment was helping the board select a changeover in management to Wickstrom. He said he decided to step aside prior to reaching his 15-year maximum to make way for younger leaders.
Davison said a changeover in the processing staff bodes well for the future. "With new hires, a new culture, a kind of a new attitude, I think we're on our way to bigger and better things," he said. He said the domestic sugar producers continue to battle with the Sugar Users Association and must defend their political situation.
Wickstrom said the Washington outlook is "confused" on the North American Free Trade Agreement and the farm bill. He said the co-op failed in an effort to preserve a pass-through deduction in the congressional tax reform package. The lost Section 1999 DPAD (Domestic Producer Activities Deduction) for cooperatives to pass through to members will cost the average 500-acre beet co-op shareholder $15,000. Sen. John Hoeven, R-N.D., sponsored a measure that failed in the Senate, and the DPAD also failed in the House version.
Wickstrom said June 6, 2017, amendments "appear to be working" to stem the tide of sugar imports illegally flowing from Mexico under NAFTA. The amendments went into effect in October 2017.
American Crystal Sugar Co. of Moorhead, Minn., holds its annual meeting in Fargo on Thursday, in conjunction with the Red River Valley Sugarbeet Growers Association.
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December 6, 2017 at 03:17PM
By Mikkel Pates | Forum News Service
Sens. John Hoeven, R-N.D., and Jerry Moran, R-Kan., on Nov. 30 introduced an amendment that would retain the "Domestic Production Activities Deduction" for agriculture. If the amendment gets added to the Senate bill and the bill passes, it would preserve lawmakers' ability to bring up the topic in reconciliation with the House.
The provision is called the Section 199 tax deduction. As co-ops like Minn-Dak pay their shareholders for their beets, the individual shareholders are allowed to deduct a portion of that from their income taxes.
Minn-Dak flows through $4 million to $7 million in deductions to its shareholder-growers. The impact for a 500-acre Minn-Dak grower is about $15,000, Wickstrom says. The issue will likely be a point of discussion at the co-op's Dec. 5 annual meeting in Fargo.
American Crystal Sugar Co., based in Moorhead, Minn., is working on the same issue. "Valley-wide, we estimate that the loss of Section 199 will result in an annual net tax increase for our shareholders of $9 (million) to $14 million just for American Crystal," says Kevin Price, American Crystal's vice president of government affairs.
That's an $11 million to $21 million annual hit for the Red River Valley in sugar beets alone. Other co-ops have a similar problem.
"Of course the timing couldn't be worse given the ag economy with depressed commodity prices. Our growers need all the tools that they have. This would be a fairly significant hit for them," Wickstrom says, adding, "Sometimes these bills move forward without an understanding as to what the impact is going to be for those involved."
He says individual cooperatives, as well as the National Council of Farm Cooperatives, are working to educate elected representatives.
$1B of $1.5T
Jon Doggett, executive vice president of the National Corn Growers Association, says the co-op deduction is one of the important issues within the tax bill. The NCGA is one of 160 groups who have signed a letter urging the House Ways and Means Committee not to take that provision out because it's important to the cooperatives.
"A lot of our members are co-op members," he says. "We're pushing on that one, but that's going to be a heavy, heavy lift because it costs money to put that back in."
Doggett thinks that's about $1 billion out of a reform package worth $1.5 trillion. He says the problem with these kinds of bills is that they solve one problem but create another problem for someone else.
"You can rob Peter to pay Paul, but sooner or later Peter is going to get pretty upset," he says.
Doggett, who spoke on a panel at the Northern Ag Expo in Fargo on Nov. 29, says agriculture needs to be wary of being cut as conservative members look to sequestration — across-the-board spending cuts — to offset the trillion-dollar tax cuts.
The NCGA sees pluses and minuses within the tax bill but is not taking a position on it.
"It's a marginal plus for most of our growers," he says, noting the organization doesn't take a position on the overall bill because there are different versions that can change quickly.
"When we get to a final, final bill, we may may take a look at it and make that decision," he says.
Other important pieces include how farmers can expense new and used farm equipment and how they use cash accounting and depreciation schedules.
Doggett thinks the tax bill and appropriations bill schedules will have a big influence in determining what's in a new farm bill and when it's passed. He thinks the earliest a farm bill will be addressed will be February or March, but it's likelier in the summer.
"There are even a few folks very quietly saying we could use another extension," he says.
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December 4, 2017 at 04:40PM
In Minnesota, producers are forecast to bin 18.9 million cwt, a 12 percent increase from last year. They are expected to harvest 45,500 acres, up 3,500 acres from last year.
The increased forecasts come after a relatively dry year in the Red River Valley, at least compared with last year. Excessive rain in 2016 prevented farmers from harvesting some of their crops, especially in northwest Minnesota and northeast North Dakota.
The Red River Valley has had average to slightly above-average rainfall, though parts of it are "abnormally dry," according to the U.S. Drought Monitor website.
Still, potato yields in North Dakota and Minnesota are estimated at 340 cwt per acre (up 40 cwt from last year) and 415 cwt per acre (up 15 cwt from 2015), respectively, according to the USDA. The quality of potatoes also is expected to be better than recent years, industry leaders said.
Sugar beet production in Minnesota is projected to hit a record high of 12.7 million tons, up 2 percent from the record set last year, according to the USDA. North Dakota should hit 6.5 million tons, up 4 percent from last year, forecasters predicted. Yields for both states should be up slightly from last year with about 31 tons per acre, according to the report.
Acres harvested this year were up 3 percent from last year in North Dakota, with harvesters there combing through 209,000 acres this season, according to the USDA. Minnesota is expected to harvest 411,000 acres of beets, about 6,000 less than last year.
Harvesters had an easier time bringing in the beet harvest, with the weather cooperating to allow producers to wrap up early in mid- to late October, industry leaders said. Sugar content was up from last year, with industry leaders saying the beet harvest had quality plants.
American Crystal Sugar Co. is projecting a stronger initial payment for this year's crop compared with 2016, according to a recent report from Forum News Service. A shareholder letter put those numbers at $46 per ton, minus $4 for unit retains.
The same letter said 2016 crop payments came at $42.45 per ton.
Corn, soybeans expected to dip
Farmers in North Dakota and Minnesota have most of their corn harvested for the season, but they are behind last year's pace, according to the USDA.
North Dakota producers are about 76 percent done with the corn crop as of Saturday, according to the NASS progress report released Monday. That's compared with 83 percent last year and the five-year average of 85 percent.
Minnesota farmers, who harvested 79 percent of their crop as of Saturday, were about 12 days behind the five-year average and well behind the 93 percent harvested at that time last year, NASS said.
The soybean harvest wrapped up in early November, about the same time as last year, according to the USDA.
The USDA predicted last week North Dakota corn producers would bring in 427 million bushels, down 17 percent compared with 2016's harvest. Minnesota should produce 1.45 billion bushels, down 6 percent from last year.
Yields in Minnesota are forecast to average 190 bushels per acre, up 6 bushels from 2016, according to the report. North Dakota's average yields are estimated to drop by 24 bushels per acre from last year to 134 bushels per acre, according to the USDA.
Soybean production in North Dakota and Minnesota is forecast at 249 million bushels and 373 million bushels, slightly below last year's production, according to the report. Average yields for the crop in Minnesota should see no change with 46 bushels per acre, while North Dakota's yields are forecast at 35 bushels per acre, down about 6 bushels per acre from last year, the report said.
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November 15, 2017 at 11:36AM