Crystal touts strength amid gloom at annual meeting

By Mikkel Pates / Agweek Staff Writer

Curt Knutson, of Fisher, Minn., chairman of the board of American Crystal Sugar Co., speaking at the annual meeting in Fargo on Thursday, Dec. 5, said "Sometimes we have to bear the brunt of a bad year." (Mikkel Pates / Agweek)

FARGO — As a grower for American Crystal Sugar Co. and chairman of the co-op’s board, Curt Knutson tried to look for a bright side to a miserable year. 

“The optimist says this is just a bump in the road of our history,” Knutson told American Crystal Sugar Co. shareholders gathered Thursday, Dec. 5, for an annual meeting after a harvest that is unmatched in difficulty because of a wet fall and untimely snow and freezes.

Tom Astrup, president and chief executive officer, spoke to a glum crowd of more than 800 at the Fargo Holiday Inn. The company’s payout is cut by 60% in payments — the result of a smaller payment on a much smaller crop.

Astrup acknowledged that “everybody” would lose money on beets this year, during a time when other crops, including potatoes, suffered as well. About 115,000 acres, or about a third, were left in the field, often with large yields of up to 35 tons per acre.

Knutson of Fisher, Minn., said farmers suffered an “unruly harvest” that left a third of the crop in the field. “Sometimes we have to bear the brunt of a bad year,” Knutson said, but he said the board had tried to do the right things to treat shareholders equitably.

Knutson stepped down after the meeting after serving his maximum terms on the board.

Andy Ford, president of Midwest Agri-Commodities Co., described how his company — a coalition since 1979 that includes American Crystal, Minn-Dak Farmers Cooperative, Southern Minnesota Beet Sugar Co., and Michigan Sugar Co. — in the past year accounted for $7.25 of the payment of the 2018 crop payment. About half of the byproducts stay in the U.S., but the rest is exported. Beet pulp largely goes into cattle and pet food.

Astrup noted that the byproduct sales account for the entire profits for farms that are shareholders in the company.

Ronald Brownstein, senior political analyst for CNN and senior editor of The Atlantic magazine, was a guest speaker and didn’t sugar-coat the political landscape.

Brownstein described a “partitioning of the country” between blue and red, and joked that the American Crystal logo includes blue and red concentric circles that don’t touch. He said that no matter how the 2020 presidential election turns out, 49% of the country will feel will feel under siege from the other.

“I wonder if we’re heading toward the most political turmoil since the 60s,” he said. “The only question is whether it’s the 1960s or the 1860s,” referring darkly to the Civil War years. He said if people are in agriculture, they have to wonder whether they’ll live in a world of trade wars or trade agreements, depending on who wins.

Much of the news of the event came out earlier. Nov. 21 completed its last of five factory district meeting, projecting a payment of $37 per ton payment, a sharp reduction from the $54.78 per ton paid on the 2018. But this year’s payment is on 7.7 million tons, instead of the 11 million tons before. The company will subtract $3 in “unit retains,” an amount withheld as an “equity contribution” from members and historically repaid after seven years.

Astrup said the company would do about $90 million in capital improvements but would have spent more without the bad crop.

Farmers who could not harvest are being assessed “fixed costs” of $343 per acre on any unharvested acres, and some sources indicated the board will study whether that needs to be tweaked to make sure there is a full incentive to harvest in difficult times, as opposed to collecting crop insurance.

American Crystal markets sugar in a pool arrangement called United Sugars Inc., with three partners — Minn-Dak Farmers Cooperative of Wahpeton, N.D., and U.S. Sugar Corporation, a cooperative based in Clewiston, Fla., and Wyoming Sugar Co. of Torrington, Wyo., which was added in the past year.

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December 18, 2019 at 12:05PM