The Sugarbeet Grower Magazine ~ Vol 49 Number 2 February 2010

Hilleshög is a business unit of Syngenta Seeds, Inc.

HILLESHÖG®, the ALLIANCE FRAME, the HILLESHÖG logo, the PURPOSE ICON and the Syngenta logo are trademarks of a Syngenta Group Company.

©2010 Syngenta Seeds, Inc. Longmont, CO 80501. All rights reserved.

�� $��!��!� ��!��!��!��$��"�# �� !��

�� !�� !��!��

— Feature Articles —Beets Atop the Corn Rows . . . . . . . . . . . . . . . . . . . . 4Colorado growers hone their strip-till system

What’s Happened in the Sugar Market? . . . . . . . . . 6ASA economist provides insight into recent price rise

Russian Federation: Sugar Industry in Transition 16Recent developments and outlook for huge nation’s sugar sector

— Regular Pages —

Dateline: Washington . . . . . . . . . 10 Roundup Ready, crop insurance

Around The Industry . . . . . . . . . 11 Who, what & where it’s happening

30 Years Ago . . . . . . . . . . . . . . . 12Excerpts from our February 1980 issue

Write Field . . . . . . . . . . . . . . . . . 14 Electrons gone astray

— Front Cover —Drivers traveling past the

Sugar Workers Federal CreditUnion in Scottsbluff, Neb., can’tmiss this large metal sculpture ofa sugarbeet. That’s the WesternSugar Cooperative Scottsbluff factory in the background.

Photo: Don Lilleboe

THE SUGARBEET GROWER February 2010 3

Page 4

Page 16

Page 6

‘Serving The Nation’s SugarbeetCommunity Since 1963’

Volume 49 Number 2February 2010

Sugar Publications4601 16th Ave. N.Fargo, ND 58102

Phone: (701) 476-2111Fax: (701) 476-2182

E-Mail: [email protected] Site: www.sugarpub.com

Publisher:Sugar Publications

General Manager & Editor: Don Lilleboe

Advertising Manager:Heidi Wieland(701) 476-2003

Graphics:Forum Communications Printing

The Sugarbeet Grower is published sixtimes annually (January, February, March,April/May, July/August, November/December)by Sugar Publications, a division of ForumCommunications Printing.

North American sugarbeet producersreceive the magazine on a complimentarybasis. Annual subscription rates are $12.00domestic and $18.00 for foreign subscribers.

Advertising in The Sugarbeet Growerdoes not necessarily imply endorsement of aparticular product or service by the publisher.

Visit Our Web Site!

www.sugarpub.com

Bob Mari will never be a poster boyfor the “This Is the Way We’ve

Always Done It” club. First, he’s a sug-arbeet grower. Second, he’s a youngbeet grower. And third, he and brotherRod are relatively new beet growers, sothey’re not bound by long-term habitsor tradition. They are, instead, moti-

vated simply by the desire and need tomake their operation as efficient —and profitable — as possible. Andemploying a strip-till production sys-tem is a primary vehicle for the Maribrothers. The northeastern Coloradogrowers have planted their center-pivot sugarbeet acres under strip till

since the 2005 crop year. The Mari foray into strip tillage

began with corn back in 2000 — thesame year they began growing sugar-beets for Western Sugar Cooperative.Corn prices were very low at the time,and they saw strip till as a way of cut-ting inputs without sacrificing produc-tivity. Its success in corn on theirsouthwestern Logan County farmprompted the Maris to expand thepractice into beets — and they’venever looked back.

The Maris initially used a leasedDMI, but now own an eight-rowSchlagel Till-N-Plant machine. Theyrun it across their upcoming beetground in early spring, anywhere froma week to a month ahead of beet plant-ing, working the soil to a 12-inchdepth. They follow corn, tilling andplanting directly on top of the old 30-inch corn rows. The three-pointSchlagel unit’s aggressive tillage doesa very good job of eliminating corn rootballs in preparation for the beets, Bobaffirms. Custom-made firmer/rollersmounted on their JD MaxEmergeplanter, coupled with trash managers,help assure a firm, clean seedbed.

“Some guys like to move over 15inches from the old corn rows, and oth-ers will criss-cross,” planting the beetsat an angle to the prior year’s cornrows, Bob notes. “But I’ve found thateven with 200-bushel-plus corn, theSchlagel will clean out the residue.”

The Maris graze their corn ground,which definitely helps in dealing withcrop residue, Bob adds. “The key isthe cows,” he quips, “and having amachine that will clear the remainingtrash efficiently from the row.” Theplanter’s residue managers easily han-dle the occasional corn root ball thatmay remain on the row surface.

Bob admits he may not be a “pure”strip tiller, because he does add an in-season pass through both the beetsand corn with a short-blade cultivator.“I’ll go quite slow — 4.0 mph or less inbeets — because I don’t want to throwany dirt on them.” He’ll sidedressnitrogen during that pass, and alsoruns an anhydrous-type shank downthe row centers. The shanks’ primary

4 THE SUGARBEET GROWER February 2010

Left: Bob Mari (at left) and his brotherRod have grown sugarbeets forWestern Sugar Cooperative since 2000,prior to its becoming a co-op. Theirfather, Clarence (right), a second-gen-eration grower for the old GreatWestern Sugar Company, stopped rais-ing beets in 1972, so there was a nearly30-year gap for the crop on the Marifarm near Merino, Colo.

Beets Atop the Corn RowsMari Brothers of N.E. Colorado Enthused With

Strip-Till System, But Always Seeking Improvement

Photo: D

on Lilleboe

Photo: Len Kerbs / Beets strip tilled into corn ground in Idaho

benefit comes much later in the sea-son: Their slots serve as a guide forthe defoliator tractor’s single-rib tires,helping the topper stay right on thebeet row. Father Clarence, who oper-ates the defoliator, says the measurereally aids defoliation quality.

Mari has not yet seen a downsideto planting beets into the old cornrows. He has used RTK for the pastthree years, and says his TrimbleAgGPS EZ-Guide® guidance systemfully complements it. “Staying in thatcontrolled traffic zone leaves theground so mellow,” he emphasizes. “I used to travel at 4.5 mph; now I’mgoing 6.0. And I’m still tilling at thesame depth.” The looser tillage zonesoil also translates into reduced fuelconsumption, he adds.

Another noted advantage to plant-ing beets in the previous corn rows isthe need for significantly less appliedphosphorus. “I sample the row, not the‘ditch,’ because that’s were I’m going togrow the crop,” Mari says. “On abouthalf my ’09 beet acres, the only phos-phorus I put down was three gallons of10-34-0, because that’s all the soil testcalled for. On some fields, I saved $50-60 an acre this past year.” On theother half of last year’s beet acreage —which had not been farmed previouslyunder strip till — he applied a differ-ent nitrogen/phosphorus mixture.

Minimizing wind erosion is gener-ally seen as a primary benefit of astrip-till production system. Most row-crop producers will also cite soil mois-ture conservation as another bigadvantage. Bob Mari agrees with bothobservations for his farm; but ironical-ly, 2009 provided the opposite scenarioin terms of moisture. It was thewettest year that his 80-year-oldfather could recall — and the Merinoarea wasn’t as wet as parts of nearbySedgwick County that tallied 18 inchesof rainfall in June alone — two inchesmore than their average annual pre-cipitation. “We actually lost somenitrogen in our strip-till slots becausewe had nine inches of rain — and a lotof it flowed into those slots,” Bobrecounts. But water infiltration —especially as compared to nearby con-ventionally tilled fields — was excel-lent, and field runoff negligible on theMari strip-tilled fields.

Bob says his biggest current chal-lenge in strip-tilled beets is to fine-tune his fertility program, especiallynitrogen. “I’ve been doing variable-rate fertilizer application for threeyears now, and my data [are] gettingmore accurate each year,” he says. Butaccounting for the corn residue is a

challenge. “Since I’m not burying it,the material tends to break down laterin the season — so it can suppress mysugars,” Mari observes. “I’ve had verygood tonnage with my strip-tilledbeets, but I’m still not where I want tobe on quality.

“It’s a process,” he continues.“We’re constantly tweaking the sys-

tem, making adjustments. Thosesmall investments add up.”

Like many others, this northeast-ern Colorado producer appreciates thecompatibility of a strip-till productionsystem and Roundup Ready® sugar-beets. His labor costs in strip-till beetswere close to $75 an acre prior to theintroduction of Roundup Ready beets.“Roundup has complemented striptill,” Mari affirms. “We now have a[weed control system] that is keepingup with the way we farm.

“Strip till and Roundup have madebeets almost as easy to grow — otherthan harvest — as corn,” he smilinglyconcludes. — Don Lilleboe �

Bob Mari came up with the concept for these firmer/rollers for his JD MaxEmergebeet planter. He took the idea to Stahley Enterprises, a machining/welding firm innearby Merino, and they built the attachments. The firmer/rollers “press the bedwhere the Schlagel strip-till pass went, and then I don’t need to do anything withmy trash whipper other than ‘tickle’ the soil a bit,” Bob explains. “Also, in a wetterspring, sometimes the strip-till shank slot doesn’t close back up as well, leaving airpockets. [The firmer/roller] will help close those pockets.” The fillers inside therollers ensure that no corn root balls will become stuck.

Photo: D

on Lilleboe

‘I’ve had very good tonnagewith my strip-tilled beets,but I’m still not where I want to be on quality.’


For more info call 519-786-3025 www. ropanorthamerica.com or e-mail: [email protected]

euro-Maus euro-Tiger

Editor’s Note: Jack Roney is hav-ing fun these days. After two decadesas a sugar industry economist, “I final-ly get to defend a price recovery,” heradiates. “This is the moment I’ve beenwaiting for in my career!”

The past year has been an excitingone in sugar markets, as world prices

have risen to a three-decade high andU.S. sugar prices have also risen dra-matically. What factors precipitatedthis price rise — and what is the prog-nosis for the remainder of the currentmarketing year and beyond?

Roney, who is director of economicsand policy analysis for the American

Sugar Alliance (ASA), addressed thosequestions and others in a February 1presentation during the annual meet-ing of the American Sugarbeet GrowersAssociation (ASGA) in Charleston, S.C.A summary of Roney’s presentationappears on these pages, with moredetails available on the ASA website:www.sugaralliance.org.

Additional coverage of the 2010ASGA annual meeting will appear inThe Sugarbeet Grower’s March issue.

As of late January 2010, worldsugar prices — hovering around 28

to 29 cents per pound, raw value —were at their highest level since 1981.In that year, the average world pricehit 40 cents a pound — second only tothe record 60-plus cents set in the mid-1970s. (At the other extreme, theworld price sagged to a meagerly threecents in 1985.) “We’ve had a lot of upsand downs since then,” Roney notes.“Right now, we are at nearly a 30-yearhigh on the world market.”

Normally, there is a wide disparitybetween the average world “dump”price and the U.S. sugar price levels.“But now we’re seeing that the worldmarket is, without question, helping topush up the U.S. price,” Roney says.(See Figure 1.)

What have been the major factorscontributing to the recent movement inU.S. sugar prices? “I’ve heard critics ofU.S. sugar policy say, ‘Ah, it’s becauseof that ‘blasted farm bill!’ ” Roneyremarks. “Certainly the farm bill hasplayed a role. But it’s not solelyresponsible, by any means.” The ASAeconomist listed these other reasons:

• The major explosion at ImperialSugar Company’s cane sugar refinerynear Savannah, Ga., in February 2008— That tragic event resulted in thedeaths of several workers and put thefacility out of production for more thana year, thus reducing the nation’s canesugar refining capacity. It had astrange effect on the sugar market,because it reduced the raw price sincethere was one less refiner bidding forraw sugar — but also increased therefined sugar price since there was oneless refined sugar supplier.

• U.S. sugarbeet planted acreage in2008 was 19% below that of the prioryear — in large part due to the highprices of acreage-competing crops likewheat, corn and soybeans. Had U.S.beet processors not been grower-ownedcooperatives, some areas probablywould not have had beets at all thatyear, Roney states. (Continued)


What’s Happened inThe Sugar Market?

ASA Economist Provides Analysis of Past Year for U.S. & World Markets — And What May Lie Ahead

Figure 1. World Sugar Market Boosting U.S. Prices(Cents/Pound, Raw Value)

Monthly Averages, 1997-2009. U.S. — #14 or #16 Contract, Delivered New York;World — #11 Contract, Caribbean Ports. Source: USDA

Accord sugar beet planterPlant your seed more effectively

-precise seed spacing and placement -robust yet light weight, low horsepower, early planting -population adjustment as you plant -individual row control

Ropa North America Inc. www. ropanorthamerica.com

www.kvernelandgroup.com

• In August 2008, then-USDAunder Secretary Mark Keenum insti-tuted an increase in the “refined”sugar tariff rate quota (TRQ).However, most of the additionalimported sugar came into the U.S. in

raw form, and that hurt the domesticraw sugar price.

• The Mexican peso was devaluedby half in summer/fall 2008 — trigger-ing a surge in sugar exports fromMexico into the U.S., which in turn

hurt domestic raw and refined prices.• The threat of raw sugar forfei-

tures prevented USDA from increasingthe TRQ, despite a predicted lowstocks-to-use ratio. USDA also accept-ed an industry recommendation to notincrease imports during the October-March period when most U.S. sugar-beets and sugarcane are beingprocessed and that sugar is becomingavailable to the market.

• Finally, a big drop in exportsfrom India and the European Unionduring the summer/fall of 2009 fed thesurge in world sugar prices. Fromexporting 5.72 million metric tons, rawvalue, of sugar in 2005/06, the EUwent to importing 2.3 MMT in 2008/09and is projected to import 3.0 MMT in2009/10. India exported 5.8 millionmetric tons, raw value, in 2007/08.Last year that country imported 1.7MMT; and for 2009/10, India is project-ed to import 2.5 MMT. India’s trans-formation from exporter to importer is,according to Roney, the biggest singlereason for the rise in the world price.

In trying to sort out the U.S. sugarmarket for 2009/10, one of the most

vexing questions is, “How much are wegoing to get from Mexico?” Under theterms of the North American FreeTrade Agreement (NAFTA), the UnitedStates and Mexico now share what isessentially a common sugar marketwithout quotas. “No one has betteraccess to the U.S. market thanMexico,” Roney affirms.

For most of 2008/09, USDA wasexpecting about 500,000 metric tons,raw value, of sugar to be exported fromMexico into the U.S. during that mar-keting year. Instead, the final volumetotaled nearly 1.3 million metric tons.

The 2009/10 projection currentlystands at just under 700,000 metrictons, raw value (Figure 2). “Oddly,whereas last year we thought USDAwas too low for most of the year, mostpeople in the trade now think USDA istoo high” in its projection,” Roneyobserves. That’s because of Mexico’slower sugar production level: 5.26 mil-lion metric tons, raw value, in 2008/09,down from 5.85 MMT the prior year.The current USDA projection of2009/10 Mexican production is about5.3 MMT, raw value — and somebelieve it will end up even lower.

“The fact that sugar production hasbeen declining in Mexico gives us hopefor the future that they’re not going tobe in a position to continually oversup-ply our market,” Roney states.

But there is a very importantcaveat here: the loophole in the


Fig 2. U.S. Sugar Imports from Mexico, 1994/95 - 2009/10(1,000 Metric Tons, Raw Value)

Unlimited access under NAFTA began as of January 1, 2008.Source: USDA-WASDE, 2008/09 & 2009/10 forecasts.

NAFTA that allows Mexico, if marketconditions are right, to import as muchsugar as it wishes from other countries(to meet its own internal needs) — andexport the then-not-needed Mexicansugar to the United States. Roneysays he’s continually evaluating theincentive for Mexico to buy worldsugar, substitute it for Mexican-grownsugar for internal use — and then shipthe displaced Mexican sugar into theU.S. market. While the hefty increasein world prices has removed some ofthat option’s attractiveness, “the incen-tive still exists,” Roney adds, since adisparity of just six to eight cents apound between the U.S. and worldprice can still make it profitable.

While obviously appreciating thecurrent sugar price recovery,

Roney emphasizes that it’s not a com-pletely “blue sky” scenario for the U.S.sugar sector.

First, “we have contracted most ofour [2009/10] sugar at lower pricesthan what we’re seeing right now,” hepoints out.

Second, percentage-wise, the U.S.price hike is less than half that of theworld price increase. The 2009 U.S.prices for raw cane sugar and whole-sale refined sugar, respectively, were17.0 and 17.1% higher than those of2008. Meanwhile, world price increas-es during the same period were 35.3and 38.7%, respectively. “The worldprice is still a more-volatile marketthan [that of the U.S.],” Roney notes..

Third, when adjusted for inflation,today’s “real” prices are only half of the“nominal” price across the 25-yearperiod between 1985 and 2009.During that same period, the U.S.sugar industry lost about half of itsprocessing and refining facilities as theindustry was pressured into rationali-zation.

Fourth, farm input costs haveincreased tremendously since 1985:machinery and equipment, up by 83%;gas and other fuels, up 109%; ag chem-icals and products, up 113%, for exam-ple. Meanwhile, there was no changein the sugar support price.

Fifth, prices of other key commodi-ties (e.g., corn, wheat, soybeans) are upsharply since 2005, while that of sugarhas been quite flat. The 2009 averageraw sugar price of 24.93 cents was only8% higher than that of 1996; the 2009average refined sugar price of 38.10cents only 30% higher than in 1996.

Sixth, the recent rise in the whole-sale sugar price is far below the rise inprice of retail sweetener-containingproducts during the same period.

So how sustainable is the currentsugar price recovery? Several key

components will help answer thatquestion, according to Roney:

First, what will happen with thelevel of sugar imports from Mexico?How tight is the Mexican domesticmarket? Will they again substitutesugar — i.e., import sugar off theworld market and ship displaced

Mexican sugarinto the U.S.?Second, what

will be thestrength ofdomestic sugardemand?Domestic sugarconsumptionhas risensteadily since1996/97, with a

slight decline projected for 2009/10.Will U.S. consumers revert back tomore high fructose corn syrup use?Will artificial sweeteners take a biggerbite out of the market?

Third, will there be an increase inthe TRQ, come April — and, if so, howlarge will it be?

Fourth, will the governments of theUnited States and Mexico finallyaccept the recommendations of thelong-working U.S.-Mexico Joint SugarIndustry Task Force? And, will Mexicocease sugar substitution?

Finally, where will 2010 U.S. sug-arbeet and sugarcane planted acreageend up — and what will be the level ofsugar production ?

On the world front, several develop-

ments will impact prices. Will sugardemand remain strong . . . will produc-tion rebound in India . . . what is theoutlook for Brazilian sugar productionand ethanol usage?

Roney reiterates that most U.S.food manufacturers’ 2010 sugar pur-chases were booked at the lower pricelevels of early 2009. Sustaining thecurrent stronger prices will give sugarproducers the “opportunity to recoverfrom past losses, and to reinvest toimprove efficiency,” he emphasizes.

The ASA economist also notes thatthe U.S. sugar industry has repeatedlytold the Obama Administration, “Ifthere is a chance of a sugar shortage,we will be the first to tell you.” Tomaintain the industry’s current strongcredibility with the Administration, itwill be critical to keep that promise, hestates.

Another key challenge will be tomaintain domestic sugar consumptionlevels. The corn industry, includingcorn refiners, obviously is working toregain consumption — which, accord-ing to USDA, is on track to be up bymore than 400,000 in 2009/10 over theprevious year (Figure 3). Productsmade with stevia — a natural, no-calo-rie sweetener — also are strong com-petitors, Roney says.

Finally, 2012 may sound somewhatdistant — but preparation for the nextfarm bill is already beginning. Thesugar industry must be — and is — atwork to ensure that the industry’sneeds are adequately addressed in the2012 farm legislation process, Roneyconcludes. �


Sugar deliveries for domestic food use, raw value; HFCS domestic disappearance,dry basis. By fiscal year; 2009/10 are forecast amounts. Source: USDA Sugar and Sweeteners Outlook (10/09) and monthly WASDE.

Fig. 3. U.S. Sugar & High Fructose Corn Syrup Consumption(100,000 Short Tons)

Jack Roney

Roundup Ready Lawsuit

On January 19, the plaintiffs inthe Roundup Ready® lawsuit askedthe U.S. District Court (9th Circuit)for a preliminary injunction to stopthe “further planting, cultivation,processing, or other use of RoundupReady sugar beets or sugar beetseeds, including the flowering ofany sugar beet seed crop, until theenvironmental impact statement(‘EIS’) has been completed andfinally approved as required by theNational Environmental Policy Act(‘NEPA’)”. They have requested aMarch 5 date for Judge JeffreyWhite to hear their argument.

The plaintiffs, who opposebiotech sugarbeets, are asking thecourt to take radical action thatwould shut down half of America'ssugar supply, causing severe dislo-cations in the domestic supply ofsugar for all consumers. There alsowould be disastrous impacts to10,000 sugarbeet growers, with col-lateral damage to the economy in 10states, along with processors andseed companies.

The plaintiffs have waited fiveyears after deregulation and twoyears after filing their lawsuit, andnow are trying to claim thatirreparable harm is imminent froma product that has been widely andsafely used on 95% of the nation’ssugarbeet acreage. This unreason-able request is not justified by the

evidence or by any real or potentialthreat. We look forward to con-fronting it in the appropriate forumfor pending litigation, which is incourt.

The U.S. Supreme Court hasalso agreed to look at issues involv-ing the 9th Circuit Court’s handlingof the Roundup Ready alfalfa case.There are some issues in this casethat could impact how our case ishandled.

Crop Insurance

Last November, the USDA RiskManagement Agency (RMA)announced a price election for the2010 sugarbeet crop at $41 per ton.This is clearly below anticipatedgrower returns, given the strongermarket conditions we see for thenext year.

We met with the RMA adminis-trator and his deputy in January todiscuss the correction of this initialestimate. We have supplied themwith timely market information tojustify an upward increase in theprice. A final determination isexpected in early February.

2010 Elections

The Scott Brown victory inMassachusetts to fill the Senateseat held by the late Ted Kennedyhas breathed new life into theRepublican recruitment process andset off alarms for the Democrats.

For many years now, we havehad an almost equally divided polit-ical base in this country, evidencedby such close presidential elections.The independent-minded voter, whois not strongly aligned with eitherparty, is seldom happy with those inpower and votes for anyone who isbetter (or different) than who theyhave. Thus, we get a pendulumeffect with each election.

The real question is, “How manyseats do the Democrats lose in themid-term election?” The impatienceand rage of the American voter willhave a big impact on what is accom-plished in 2010. Watch for surpriseretirements in the weeks ahead asan indication of the battle on thecampaign trail. The “silly season” ofthe November elections has official-ly begun. �

Dateline:Washington

ByLuther Markwart

ExecutiveVice President

American Sugarbeet

Growers Assn.

This unreasonable request isnot justified by the evidence orby any real or potential threat.We look forward to confrontingit in the appropriate forum.

We have supplied RMA withtimely market information tojustify an upward increase in the 2010 price election.


THE SUGARBEET GROWER / Upper Midwest February 2010 1v

Jan. USDA Crop Size Estimate

State

CaliforniaColoradoIdahoMichiganMinnesotaMontanaNebraskaNorth DakotaOregonWashingtonWyoming

Total U.S.

25.328.6116.0136.0399.030.737.3197.05.91.627.1

1,004.5

24.635.0163.0136.0448.033.652.6218.010.5—

24.0

1,145.3

41.626.531.228.724.726.822.625.933.141.924.5

26.8

40.027.034.324.423.529.824.522.037.6—

28.0

25.8

1,052758

3,6193,9039,855823843

5,10219567664

26,881

984945

5,5913,31810,5281,0011,2894,796395—672

29,519

1,000s of Acres Tons/Acre 1,000s of Tons2008 2009 2008 2009 2008 2009

Area Harvested Yield Production

USDA’s January estimate of 2009U.S. sugarbeet production was

29.52 million tons — about 2.64 mil-lion tons higher than the size of the2008 U.S. beet crop.

The bigger crop was the result ofmore harvested acres (1.15 million in2009, compared to 1.0 million the pre-vious year). The average yield in 2009— 25.8 tons per acre — is one tonbelow the average in 2008.

At more than 10.5 million tons in2009, Minnesota is again by far thenation’s leading beet-producing state.Idaho, at 5.6 million tons, is second.Its 2009 production level is nearly two

million tons above 2008 — a reflectionof 2009 growth in both acres and aver-age yield. Idaho growers harvested163,000 acres in 2009 (versus just116,000 in 2008) with an average yieldof 34.3 tons/acre (compared to 31.2tons the prior year.)

North Dakota was the third lead-ing beet-producing state in 2009 with4.8 million tons, followed by Michiganat 3.3 million.

On the sugarcane side, 2009 pro-duction of cane for sugar totaled 28.4million tons. That compares to the2008 U.S. output of 26.1 million tons ofcane for sugar. �

Nation’s Beet Crop Up By Almost 10% from 2008

MT675C

!"#$%&'()*+,-.&'/!+0)

1*)&2$0 . !"#$%"#"&!!

3-.0$ !"#'%$#(%!'

4-&''&)!%#$$&#%&!!

5*6-789-$/)!%#(&$#&'%!

:-0#;8<*%%2)!%#(()#(!"!

!"# !$%"# &'!# (%)*(%+,# -*&.#

/!'%"%(# -0*11%23%"# &"*)&!"+#0*$%#4%%2#0*"(#*&#'!"5#62#+!7%#!8#&0%#'!"1(9+#7!+&#(%7*2(623#*2(# )0*11%23623# )!2(6&6!2+:#;0%&0%"# 6&9+# 62$!1$%(# 0*<1623#+<//16%+# !$%"# &0%# 6)%# 62#=2&*")&6)*,# 4<61(623# =7%"6)*2#"!*(+# *2(# 62&%"+&*&%# 0630'*>+#!"# /<11623# *# )06+%1# /1!'# !"# *6"#+%%(%"#!2#?!"&0#=7%"6)*9+#7!+&#/"!(<)&6$%# 8*"7+,# -0*11%23%"#&"*)&!"+# 0*$%# 4%%2# /"!$6(623#/!'%"#*2(#/"!(<)&6$6&>#*&#2%'#1%$%1+#!8#%8@)6%2)>:#

MEET THE TECHNOLOGICALLY ADVANCED C-SERIES INNOVATION NEVER LOOKED SO GOOD

<*'=0 !"#$'!#("!!*

>'*.78<0'?2 !"# %#&$('

@*.?-.20. !"#$&$# & &*

A"&'7&&.)!%#$$%#)$&!*

B-2)*'+? !"#$$(#!'+!*

C-+?-.20. !"#&%)#"&!!

In an early January statement, TheSugar Association applauded Pepsi-

Cola for reintroducing ‘PepsiThrowback,’ which will be sweetenedwith all-natural sugar instead of highfructose corn syrup.

Pepsi is not the only beverage bot-tler making a return to sugar. DrPepper recently released Heritage DrPepper, and Gatorade just made asimilar announcement to move back tosugar. Snapple and Jones Soda havelikewise moved away from corn syrup.

“Consumers are making a moveback to sugar, and we’re thrilled thatPepsi is getting back to the basics,”said Andy Briscoe, CEO of the SugarAssociation. “Pepsi Throwback givesshoppers another opportunity tochoose natural sweeteners instead ofmanufactured ones.”

High fructose corn syrup, inventedin 1957, was rapidly introduced intothe U.S. soft drink market in the1970s and 1980s. Sugar remained thebeverage sweetener of choice in

Europe, Canada, Mexico and mostareas outside the United States.

Now, America appears to be shift-ing back again. Shoppers are alreadyseeing Pepsi Throwback on grocerystore shelves as part of Pepsi’s secondeight-week trial. A similar trial wasconducted in March of 2009.

“Hopefully, this reintroduction ofPepsi Throwback means that the firsttrial was a success,” Briscoe explained.“And hopefully, the second trial will bejust as successful so sugar-sweetenedThrowback will become a permanentproduct on grocery store shelves.When you think about it, sugar is theonly sweetener that is all natural,only 15 calories, been safely used forover 2,000 years, and is a sweeteneryou can pronounce.”

Consumers having trouble locatingsugar-sweetened beverages in theirstores can order them through theSugar Association’s E-Commerce web-site. That address is: www.sugar.org/ebusiness/beverages.html. �

2v THE SUGARBEET GROWER / Upper Midwest February 2010

Pepsi Throwback Helps ConsumersGet Back to the Sweet BasicsSugar Association Applauds Pepsi-Cola Reintroduction

We Are the Manufacturer of the

DEE RowfinderProviding Parts, Sales & Service

DealerInquiriesWelcome

CW Crookston Welding & Machine, Inc.

Highway 75 South • Crookston, MN 56716

(218) 281-6911 or

(800) 569-1309

The OnlyRowfinder on The Market To Control BOTHSteering & Depth

• A full line of sprockets, rollers & idlers for harvesters.

• Carrier of heavy-duty roller chain.

• We build and repair grab rolls for beet harvesters;also plastic-sleeve them.

• Flails for sugarbeet defoliators . . . bearings . . .pillow blocks . . . drive lines.

• Complete line of keyed shafts and cold-rolled shafts.

• Gearbox exchange program for WIC defoliators.• Grab roll exchange for WIC harvesters.

— Advertisers —We offer you comprehensivecoverage among growers in every North American sugarbeet production area!

For Details, Contact:Heidi Wieland(701) 476-2003

[email protected]

Upcoming 2010 Issues:• March

• April/May • July/August

Narrow Tires & Axles.Less Damage to Your Crop.

Apache High-Clearance Sprayersfor Sugarbeet Applications

Designed to accomodate 22” sugar-beet rows, Apache sprayers are built with narrow tires set on 88” centers, with the combination of dual tires on the rear. Combine this with Apache’s dependable mechanical drive and smooth hydraulic suspension, and you’ve got the perfect sugarbeet sprayer.

“The lightweight Apache is the perfect self-propelled sprayerfor the sugarbeet custom applicator and farmer.”

Fillbrandt’s Bigg Dogg Agg, Felton, MN

Call today 1-866-362-2472 oremail [email protected] to receive a FREE DVD of customertestimonials and the Apache in action.

Paul PetersonET North Central Regional Manager

Cell: 701-261-6920

Janson Equipment9676 Saginaw St.Reese, MI 48757

989-868-4118

Park River Implement701 Park St. W.

Park River, ND 58270701-284-6316

Janson Equipment7581 E Monroe Rd.

Breckenridge, MI 48615989-842-3141

Central Sales3976 Hwy 281

Jamestown, ND 58401701-252-7030

Janson Equipment799 Island Hwy.

Charlotte, MI 48813517-543-0070

Central Sales151 Langer Ave. S.

Casselton, ND 58012701-347-4432

Pioneer West61055 McDonald LaneLaGrande, OR 97850

541-663-9375

The winter/spring 2010 NorthDakota State University planter

test stand schedule is provided atright. Area growers wishing to havetheir individual sugarbeet planter

units checked out for wear and otherpotential problems are encouraged tocontact their sugar company agricul-turist or the host site to make anappointment.

Several hundred Minnesota, NorthDakota and eastern Montana growersbring in their beet planter units fortesting each year. A late-1990s surveyof participants estimated the cumula-tive value of those visits (based onone-third of the Upper Midwestregion’s beet acreage being seededwith test stand-evaluated units) atbetween $2.5-3.0 million, in terms ofavoided seed spacing and plant popu-lation problems.

Test Stand Clinic Sites

February 24 & 25 —• Sidney Sugars, Sidney, Mont.

March 2 —• Minn-Dak Co-op, Wahpeton, N.D.

March 3 —• Minn-Dak Co-op, Wahpeton• JD Implement, Mahnomen, Minn.

March 4 —• Minn-Dak Co-op, Wahpeton

March 9 —• Southern Minn Co-op, Renville

March 10 & 11 —• Southern Minn Co-op, Renville• Tim Sartents / Northstar Water

Building, Ada, Minn.March 15 —

• RDO Equipment, Casselton, N.D.March 16 —

• McMartin Farm, St. Thomas, N.D.March 19 —

• JD Equipment, Grafton, N.D.March 22 —

• Steve Williams Farm, Fisher, Minn.• Betaseed Research, Moorhead

March 23 —• Steve Williams Farm, Fisher• Betaseed Research, Moorhead• Oppegard Equipment, Hillsboro

March 24 —• Steve Adams Shop, East Grand Forks, Minn.

• Oppegard Equipment, HillsboroMarch 25 & 26 —

• Steve Adams Shop, E. Grand Forks• Evergreen Implement, Warren, Minn.

March 30 —• Hefty Seed Co., Pembina, N.D.

March 31 & April 1 —• Hilleshog Research Farm, Glyndon, Minn.

• Kittson County Implement, Kennedy, Minn.

April 5 & 6 —• Cavalier Implement, Cavalier, N.D.

April 7, 8 & 9 —• Crystal Seed Plant, Moorhead

Planter Test Stand Schedule

4v THE SUGARBEET GROWER / Upper Midwest February 2010

7623 County Road 19Tintah, MN 56583

Phone: (218) 369-2136Fax: (218) 369-2680

Rotary Hoes - 60 to 88 Ft.

All Crop SprayerUp to 2000 Gal. Tank

HIGH-PROFILEBROADCAST SPRAYERS

Boom Width Up to 132 Feet1,000- to 1,500-Gal. Fiberglass Tanks

— Contact Keller Today —

Model 1500

Model 1000

Call todayfor pricing.

Convert yourbandsprayer to a

broadcastsprayer!

V-Plows for JD Planters

Feasibility Study ProceedingFor Another Louisiana Refinery

The November/December issue ofThe Sugarbeet Grower carried informa-tion on the new cane sugar refinerybeing built at Gramercy, La., by a part-nership comprised of Cargill, Inc.,Imperial Sugar Company and SugarGrowers and Refiners (“SUGAR”), agroup of cane mills owned by Louisianasugarcane producers. The joint ven-ture — Louisiana Sugar Refining (LSR)— is expected to refine approximately75% of the raw sugar coming fromLouisiana-grown cane.

Now comes word of another possiblenew cane sugar refinery in the state.According to a recent report from NewOrleans-based Sugar Journal, thiseffort involves the company whosemills grind the other 25% of Louisianacane — M.A. Patout and Son, Ltd. —and the Amalgamated Sugar Company,the Idaho-based beet processor.

Here is the mid-January SugarJournal report:

M.A. Patout and Son, Ltd., aLouisiana sugarcane producer and rawsugar manufacturer, and theAmalgamated Sugar Company LLC, anIdaho sugarbeet processor, are pursu-ing the feasibility of building and oper-ating a 400,000-ton-per-year canesugar refinery in Patoutville, La.

The refinery is expected to process100% of the annual raw sugar produc-tion from Patout's three operating fac-tories: Enterprise, Raceland andSterling. In 2009, the three factoriesproduced over 400,000 tons of sugar.The refinery, located in Patoutville,La., would allow access to TRQ sugar ifrequired.

“Patout and Amalgamated arepleased to pursue the feasibility of sucha venture that will allow the owners ofPatout, the sugarcane growers support-ing the three factories and the own-ers/producers of Amalgamated, anopportunity to capture value addedreturn for their production,” CraigCaillier, president/CEO at M.A. Patout,said. “Patout and Amalgamated, ifapproved, will make a substantialinvestment and commitment in theLouisiana sugar industry for them-selves and the farmers who producethe sugarcane.”

27th International SweetenerSymposium Is July 30-Aug. 4

The 27th International SweetenerSymposium is scheduled for July 30 toAugust 4, 2010, at the Vail MarriottMountain Resort & Spa in Vail, Colo.This popular event is sponsored by theAmerican Sugar Alliance.

Upheaval in the global financialsector, integration of the U.S. andMexican sugar markets, and new sup-ply and demand realities have madefor fascinating times for the worldsugar economy. Where do we go fromhere? Can U.S. and Mexican sugarproducers find financing and somepromise of market stability? Canindustrial buyers of sugar depend onample supplies? Are the sugar policiesof both countries up to the test of fullU.S.-Mexican market integration? Doa WTO Doha Round agreement orother trade deals presage threat orbenefit for sugar producers in theNorth American and elsewhere?

These questions and others will beexplored by panels of industry expertsand key policy makers.

Traditionally, about 400 peopleattend the symposium to hear aboutsignificant and timely issues affectingthe industry and to network with theirsweetener industry colleagues. Theschedule allows free time every after-

noon to enhance industry relations. For more information on the 2010

International Sweetener Symposium,visit the American Sugar Alliance web-site — www.sugaralliance.org — or callthe ASA at (703) 351-5055.

Valent & Monsanto Reinforce‘Roundup Rewards’ Program

Valent U.S.A. Corporation andMonsanto Company have strengthenedtheir partnership in the RoundupRewards® program with updated incentives to help farmers protect theirherbicide investment in 2010.

The companies have joined forceson two programs: the VolunteerRoundup Ready® Corn 2 Cost-ShareAllowance and the START CLEAN,STAY CLEAN.™ Assurance Plan.

Enhanced for 2010, farmers whouse Valent’s Select Max® Herbicidewith Inside Technology™ to help controlvolunteer Roundup Ready Corn 2 inRoundup Ready soybeans, cotton orsugarbeets may now receive up to $4per acre. Additionally, for farmersfighting weeds in Roundup Ready soybeans with Valor®, Valor XLT orGangster® residual herbicides andRoundup WeatherMAX® herbicide, thecompanies will offer up to $7 per acre ifa field requires a second in-crop treatment in a season. �

Around The Industry


48th Annual

International Sugarbeet InstituteMarch 17 & 18

Alerus Center Grand Forks, N.D.

North America’s Largest Sugarbeet Trade Show!100,000+ Square Feet of Exhibits Representing 125 Companies

$4,000,000+ of Equipment & Products on Display

— Doors Open at 9:00 a.m. Both Days —

30 Years Ago Excerpts from the February 1980 Issue ofThe Sugarbeet Grower

Storage Rot Costs Beet Industry Millions DuringEach Campaign — “A sugar factory could have recov-ered 2.8 million more pounds of sucrose from 280,000tons of sugarbeets had they been protected against stor-age rots with the fungicide thiabendazole or been geneti-cally resistant to the rots.

“Those estimates by [USDA] plant pathologist WilliamM. Bugbee, Fargo, N.D., are based on results comparinggenetically resistant breeding lines and susceptible com-mercial hybrids, with and without fungicide dipping,under field conditions.

“The estimates are possible because untreated, sus-ceptible hybrids in one test developed about the sameamount of rot as was found in rot-susceptible roots heldmore than 100 days at a sugar processing factory.Thiabendazole treatment reduced storage rot to a traceamount in susceptible hybrids after 100 days ofstorage. Rot in the genetically resist-ant lines was nearly as low.

“The research by Bugbee and[USDA] plant physiologistDarrell F. Cole suggests the levelof protection that is possibleagainst rot-caused sucrose losseswhen genetic resistance has beenincorporated in cultivars acceptableto the industry. Two breeding linesdeveloped by Bugbee and released tobreeders in 1977 . . . carry high lev-els of resistance to Phoma beta, thechief fungal cause of sugarbeet stor-age rot in this country, as well asmoderate resistance to Botrytis cinereaand Penicillium claviforme rots. . . .

“Thiabendazole is not generallyavailable for use on sugarbeets. TheEnvironmental Protection Agency, how-ever, has granted an exemption to regis-tered uses of thiabendazole inWashington, Idaho and Michigan for treating 400,000tons of sugarbeet roots.”

Coca-Cola Says HFCS Is OK — “Coca-Cola Co., thenation’s largest soft drink producer, has decided to usehigh-fructose corn sweetener in Coke, a move likely tosend significant ripples through the entire sweetenerindustry. The move by the nation’s largest sugar buyersent sugar prices tumbling, but they have recovered andcontinue to move higher.

“Coca-Cola has allowed bottlers to use a high level ofhigh-fructose corn sweetener in its non-cola productssince June 1978, but the decision to use it in its best-known brand has been eagerly awaited by the fructoseproducers. Their product is normally at least 10% lessexpensive than the beet and cane sugars long used tosweeten Coke. . . .

“Coca-Cola had resisted using the sweetener in itsCoke drink because of taste problems. A few years ago, J.

Paul Austin, the company’s chairman and chief executiveofficer, was quoted as saying that when high-fructosesweeteners are mixed with the ingredients used to makeCoke, a chemical reaction is produced that throws off thetaste. But the company apparently has been able to solvethat problem. Coca-Cola said lab tests and an 18-monthconsumer test market at a company-owned bottling plantshowed there wasn’t any difference in taste or qualitybetween fructose-sweetened Coke and regular Coke.”

Carter Cuts Tariff — “President Carter reduced theduty on imported raw sugar to 0.625 cent a pound, thelowest level allowed by law. The decision, announced byAlfred Kahn, chairman of the Council on Wage and PriceStability, brings the duty down from the 2.8125-cent level

that has been in effect since Nov. 11, 1977.Kahn said the reduction would relieveconsumers of the ‘unnecessary inflation-ary effect’ of the higher duty.Specifically, he said the lower dutywould save consumers more than $450million in 1980.

“Kahn said that world prices forraw sugar have risen high enough thatdomestic producers can cover their‘reasonable’ costs without a higherduty. But he said the Carter admin-istration remained committed to takeactions to assure producers a mini-mum price of 15.8 cents a poundshould prices fall in the future.”

Congress Blamed —“American consumers can thankthe United States Congress forsugar price increases about to

come their way, according to S.N. Knight,Sr., president of the Florida Sugar Cane League.

“Since the Sugar Stabilization Act of 1979 was defeatedby Congress October 23, domestic spot market prices haveincreased to over 20 cents per pound — a much higherprice than the 15.8 cents called for in the legislationbacked by the sugar industry.

“ ‘We may be about to witness a situation similar to theone in 1974 which also occurred when Congress failed toenact legislation to stabilize the price of sugar,’ saidKnight in his address during the Florida Sugar CaneLeague’s 16th annual meeting. ‘In 1974, the sugar indus-try was unjustly accused of raising sugar prices to thedetriment of American consumers. Let the record standclear now. The United States Congress and the office ofthe President must shoulder most of the responsibility forthe tremendous instability in today’s sugar market,’ con-tinued Knight.

“According to the League president, Congress wasfooled in the name of consumers. Some sugar refiners andindustrial users used the consumer movements to kill thesugar bill, saying the legislation would be inflationary.” �


The fungicide you’ve always wanted is finally within reach.

©2009 Syngenta Crop Protection, Inc., P.O. Box 18300, Greensboro, NC 27419. Important: Always read and follow label instructions before buying or using this product. Inspire XT is not registered for use or sale in all states. Please check with your state or local regulatory agency before buying or using this product. Inspire® XT is a trademark and the Syngenta logo is a registered trademark of a Syngenta Group Company. Syngenta Customer Center: 1-866-SYNGENT(A) (796-4368). www.farmassist.com MW 1TNV8021-A 2/09

There’s no better partner for your sugarbeet disease management program than Inspire® XT fungicide. Trusted the world over, Inspire XT is proven to deliver long-lasting control of Cercospora leaf spot, powdery mildew and other damaging diseases. And as part of your overall spray program, Inspire XT can help sustain fungicide effectiveness and manage resistance. Top of the class.

Iran into a disagreement with elec-trons again today. Sometimes they

are so helpful. Marching in nicestraight rows like a Russian May Dayparade, their disciplined behavior andorderly rows lead you to believe theycould do great things, and they can.

But with just one touch of thewrong button, they assume all theorganizational characteristics of akindergarten soccer team. I quicklyget to the point where the only alter-native is to unplug the game, get themback on the “buss” and start over.

Electrons Gone Astray

It’s happened often in my pastAnd once again today.

Just as I think I have it set,Electrons go astray.

I try to set some new deviceTo make it do my will.

The first 16 steps have worked out,I start to feel a thrill.

Is it possible this timeThat new device is set?

Even if it’s going wellI have learned not to bet.

For just as triumph is at handAnd Murphy is at bay,

Some circuit lets a few get out,Electrons go astray.

This time it is a TV dishI’m trying to outfox.

The hard drive on the old one crashed;They sent one in a box.

The four-pound installation bookThat came for me to read

Has a separate languageFor every nation, tribe or creed.

You’d think the English portionWould do me the most good.

But somehow the Hebrew chapter isAs easily understood.

Start with menu, like it says,Then follow in the book.

A 14-digit product code?Where was it that I look?

I make it to the final page,The pressure starts to show.

Like a NASA mission specialist,I feel the tension grow.

What’s that, the screen says reset !Somehow I made a mess.

My big old farmer fingersHave made an errant press.

“Where are you headed?” my wife asksAs I stomp out the door.

“I am going to get my grandsonTo finish up this chore.”

David Kragnes farms near Felton, Minn.He is a former chairman of AmericanCrystal Sugar Co., and currently serveson the board of directors of CoBank.

WriteField By David Kragnes


Editor’s Note: The Januaryissue of The Sugarbeet Grower car-ried Part One of a two-part serieshighlighting current publicresearch on strip-till sugarbeet pro-duction. It featured a summary ofUSDA work in eastern Montana, arecap of a 2009 zone-till (strip-till)field-scale trial conducted byMichigan Sugarbeet Advancement,and a report on a three-year studyat North Dakota State University(Red River Valley).

The second part of this seriesfeatures reports on university strip-till work in Idaho and Nebraska, aswell as an update on USDA-ARSstudies in Idaho. Initially, weplanned to include Part Two in thisFebruary issue. Instead, we willnow do so in the March issue ofThe Sugarbeet Grower.

We’ll also continue to bring youarticles about grower experienceswith strip-till sugarbeet production.

Strip-Till ResearchPart Two in March

Buying or SellingBeet Stock?

800.279.3200, ext. 3402alerusagstock.com

The Alerus advantage: Current market pricing Signed written contracts Escrowed funds Assistance with transfer documents

The leader in sugarbeet stockbrokerage since 1994.

This information does not constitute an offer to buy nor a solicitation to sell. The products offered (1) are not FDIC insured, (2) are not deposits or other obligations of a bank or guaranteed by a bank and (3) involve investment risks, including possible loss of principal amount invested. Alerus Securities is a wholly owned subsidiary of Alerus Financial.

Member FINRA & SIPC

CRYSTAL SUGARBEET SEED distributed by: ACH Seeds Inc. 1.877.224.7333 Crystal Beet Seed 1.218.236.4788

Russian beet sugar production hasbeen trending upward in recent

years, but it still only accounts forabout one-half of the country’s annualdemand. To fill this deficit, Russiamust import massive volumes of rawcane sugar — most of which is thenrefined in dual beet and raw cane pro-cessing facilities.

Sugar consumption in Russia ischanging from a dominance of homeuse to a greater share of use generat-ed by a growing food processing indus-try. But with flat to negative popula-tion growth (plagued by low lifeexpectancy, especially among males,due to poor health care and heavysmoking and alcoholism), total sugarconsumption is not likely to grow sig-nificantly in the years ahead.

Production Trending Up After Period of Decline

The sugarbeet production and pro-cessing industry is an important com-ponent in Russia’s agro-industrial sec-tor and food supply. Sugarbeet har-vested area in recent years has rangedbetween 800,000 to 1.0 millionhectares (about 1.98 million to 2.47million acres) and is forecast at900,000 hectares for 2009/10(September-August). Sugarbeet pro-duction is forecast at 26.0 metric mil-lion tons in 2009/10. The beet areahas not increased significantly inrecent years, mainly because of com-petition from spring-planted grains.

Russia is a vast country, with anarea of 17 million square kilometers

— about 1.8 times the size of theUnited States. The terrain is charac-terized by a broad plain with low hillswest of the Ural Mountain range; avast coniferous forest and tundra inSiberia; and uplands and theCaucasus mountain range along thesouthern border adjacent to the BlackSea. Sugarbeets are grown in thewestern part of Russia, with abouttwo-thirds of plantings extendingsouth of Moscow (map below).

A large share of sugarbeet plant-ings are in the North Caucasus region,mainly in Krasnodar oblast (state).The other major producing area is theCentral Black Earth region south ofMoscow in Belgorod, Kursk andVoronezh oblasts. The remaining beetareas are in the Urals and westernSiberia. About 50% of imports areprocessed in the North Caucasusregion due to the location of the BlackSea port of Novorossijsk, where mostof the raw cane sugar is imported.

Russia’s sugarbeet agriculture islocated in a continental climate char-acterized by extremely cold winters.For example, a key site is Krasnodar,which is at 45 degrees north latitudeand has winter temperatures averag-ing (Centigrade) 1.9 in December, -0.1in January, and zero in February, withtotal average annual precipitation of673 mm (about 26.5 inches). Giventhe climate, with planting in April-May and a harvest season ofSeptember-November, Russia’s sugar-beet farmers are periodically hit byyield and acreage losses due to frosts,

Russian Federation

— A Sugar Industry in Transition —

By Peter Buzzanell*

* Until his retirement from governmentservice, Peter Buzzanell was head ofthe Sweetener Analysis Unit at USDA’sEconomic Research Service. Currently,he is senior analyst at the consultingfirm, Buzzanell & Associates. Theauthor wishes to thank the followingindividuals for their assistance inpreparing this article: SergeyGudoshnikov, senior economist at theInternational Sugar Organization; MarkBrusberg and Thomas Puterbaugh,meteorologists with the Office of ChiefEconomist, USDA; Chris Rhoten, factorymanager for Amalgamated SugarCompany’s Paul, Idaho, facility; staff ofthe Office of Agricultural Affairs,American Embassy, Moscow, and theirperiodic reporting on the RussianFederation’s sugar sector.

— Conversion Factors —• Hectare = 2.472 acres• Metric Ton = 2,206.6 pounds• Kilogram = 2.2046 pounds• Rubles (as of 12/31/09)

An Exclusive to The Sugarbeet Grower

Russia: Percent of Total Sugarbeet Area, By Oblast (2004)

Source: Production Estimates & Crop Assessm

ent D

ivision, USDA Foreign Agricultural S

ervice


both at planting and harvest times. Yields the past five seasons averaged 25.9 (metric) tons

per hectare (about 11.6 short tons/acre) versus 20.1 tonsthe five previous years — up nearly 30%. Analysts famil-iar with the Russian industry believe that the focus of sug-arbeet agriculture should be on increasing yields ratherthan increasing area. With a higher level of fertilizer andpesticide inputs, the use of imported high-quality seeds(mainly from Europe) and improved management systems,the potential for increasing yields from the present level issubstantial.

To process beets, Russia currently has 78 beet sugarfactories — down from 96 factories in 1990. Russia’s beetfactories are small, with an average daily slicing capacityof 3,500 metric tons (about 3,850 shorts tons). This com-pares with the U.S. industry of 22 factories and an averageslicing capacity of 7,400 short tons. According to staff ofthe International Sugar Organization, the Russian beetsugar processing industry is highly concentrated in termsof ownership, with the six leading companies responsiblefor about 70% of beet sugar production.

Russia’s factories are forecast by USDA/Moscow to pro-duce 3.2 million metric tons of beet sugar, raw value, in2009/10 — down from the year before due to reduced areaand lower yields, but well above beet sugar production dur-ing the first half of the 2000s (Table 1).

Given the antiquated equipment in use at many mills,there is, periodically, a shortage of processing capacity insome regions when the crop is large. To upgrade process-ing, the Russian government’s Commission on AgriculturalIssues has prepared a development program for the sugar-beet processing industry for 2010-12. The program isaimed at increasing beet sugar production to 4.3 million(metric) tons by 2012/13. The planned program envisionssubstantial investments to upgrade the processing sector,including funding from the federal budget and the remain-ing sourcing of funding originating from factories and bankloans. The program forecasts the beet sugar share of totalsugar supply rising from 60% in 2008/09 to 73% in 2012/13.

The relationship between processors and farmers hasbeen changing in recent years. In the recent past,

processors would assist farmers through barter deals. Forexample, instead of paying with money, beet farmers wouldpay sugar processing fees by relinquishing a percentage oftheir crop. Or, farmers would deliver beets to processorsand receive as payment refined sugar for as much as 70%of their beet deliveries. Currently, a payment to growerson a tolling basis is no longer the main system. The ISOstaff reports that about 50% of Russian sugarbeet output isnow produced by the beet factories themselves, with mostof the rest sold and bought in a normal monetary way.

Farm-gate prices for sugarbeets have increased over thepast few years, reaching 1,600 rubles (about US $53.40)per metric ton in 2008/09. In calendar 2008, wholesaleprices for refined sugar were 16 rubles per kilogram atrefineries, with retail prices for refined sugar varying from20 to 35 rubles per kilogram, according to the RussianState Statistics agency.

Beginning in January 2009, prices increased significant-ly — from 15.82 rubles per kilogram in that month to 22.70rubles in August. Prices started to fall in September 2009after sugar from the new harvest season started to appearon the market. Prices are expected to rebound if worldsugar prices continue to rise.

To ensure that domestic prices remain viable for farm-ers and processors, the Russian government schedules sea-sonal import duties to be imposed on both raw and refinedsugar imports. The objective is to make sure imports don’tflood the market and depress prices.

Cane Sugar Imports Among World’s Highest

The U.S. Office of Agricultural Affairs in Moscow fore-casts total Russian sugar supply for 2009/10 at 6.9 million(metric) tons, with stocks and beet sugar productionaccounting for 57% and imports of raw and refined sugarfilling the supply deficit. Imports of raw cane sugar areexpected to total 2.5 million tons. They oscillate from yearto year, depending on domestic beet sugar production lev-els. Imports of refined beet sugar have been fairly steadyat 300,000 tons for the past several years (Table 2).

According to Russia’s Federal Customs Service, imports

Sources: International Sugar Organization, USDA/Moscow,Buzzanell & Associates, Inc. *Projected

5-Year Av.: 1986-901991-951996-2000Annual:2000/012001/022002/032003/042004/052005/062006/072007/082008/092009/10*

MarketingYear

2000/012001/022002/032003/042004/052005/062006/072007/082008/092009/10*

1,4751,272902

860910800920950965

1,0401,0001,000900

5,3504,6003,7003,2503,6002,6002,6502,8002,5002,500

300250300420700300300300300300

260410260110110110180200200200

5,3904,4403,7403,5604,1902,7902,7702,9002,6002,600

22.4917.0315.55

19.5117.9119.3820.9822.8422.5921.1528.0129.0128.89

33.2021.6714.03

15.8016.3015.5019.3021.7021.8022.0028.0029.0026.00

2.8462.1081.486

1.5501.6301.5801.9302.2502.5003.1503.2003.5503.200

8.589.7310.59

9.8210.0110.1910.0110.3711.4714.3211.4312.2412.31

SugarbeetHarv. Area(1,000 ha)

BeetYield(MT/ha)

SugarbeetProduction

(MMT)

Beet Sugar

Production(MMT)

Raw CaneSugarImports(1,000 MT,Raw Value

RefinedBeet SugarImports(1,000 MT,Raw Value

RefinedSugarExports(1,000 MT,Raw Value

Net SugarTrade

(1,000 MT,Raw Value

SugarYield(Per MT of Beets)

Table 1: Russian Federation — Sugarbeet Area,Yield & Production / Beet Sugar Production & Yield

Table 2: Russian Federation — Sugar Imports & Exports

Source: USDA/Moscow, World Trade Atlas *Projected


of raw cane sugar are now mainlyshipped in from Brazil. Last year,Brazil accounted for nearly 90% of rawimports and Cuba only 6% (reflectingthe sharp decline of that nation’ssugar industry). Gone are the bartertrade agreements under which Russiaagreed to send Cuba Russian crude oilin exchange for Cuban raw cane sugar.

There currently is only one stand-alone raw cane sugar refinery inRussia. The bulk of the imported rawcane sugar is refined at beet process-ing plants that have dual capacity toprocess raw cane sugar as well as sug-arbeets. There are about 28 of thesedual facilities in Russia.

According to technical experts, nospecial investment is needed to oper-ate a dual facility. (In the U.S., thistype of operation is not practical, how-ever — largely due to the location ofU.S. beet plants. However, in the1980s Spreckels Sugar Company didundertake this type of operation atsome of its California plants.Interviews with former Spreckelsemployees revealed that the refiningof raw cane sugar at their beet plantswas successful technically.)

While raw cane sugar is muchneeded in Russia to fulfill the supplydeficit, domestic sugarbeet producershave lobbied the Russian governmentto establish long-term seasonal duties.The aim of these duties is to supportproducer incomes by ensuring a levelof market stability in regard to prices.

Currently, the seasonal dutyranges from $164 to $270 per ton,based on the New York MercantileExchange (NYME). When prices onthe NYME are high, the Russian gov-

ernment sets the import duty at alower part of the range, and viceversa. The timing of the duties isadjusted periodically, but they’re gen-erally in place during the sugarbeetprocessing season in an effort to createmore-favorable market conditions fordomestic sugar farmers.

Turning to refined sugar trade, thelargest suppliers of refined sugarimports are Belarus, Moldova, Polandand Brazil. The Russian andBelarusian ministries of agricultureagreed in September 2009 thatBelarus could export 150,000 (metric)tons to Russia in 2009/10 — the samelevel agreed upon for 2008/09. Asnoted on Table 2, Russia is expected toexport 200,000 tons of refined sugar.This sugar is mainly shipped toKazakhstan, Uzbekistan, Tajikistan,and Georgia.

Population Stagnation Stymies Sugar Demand Expansion

Russia’s sugar consumption in2009/10 is forecast at 6.05 millionmetric tons, continuing a gradualupturn over recent years, but still wellbelow the levels of the early 2000s.

For Russia’s population of 141.9 mil-lion, per-capita sugar use is estimatedat about 40 kilograms (88 pounds).

Traditionally, about 60% ofRussia’s sugar use has been for homeconsumption. Russians use sugardirectly in their national drink (hottea), for in-home canning of fruits,vegetable, jams and jellies, and invodka (samogon) and fortified wineproduction. At various times, the gov-ernment has increased the minimumprice of vodka. When the legal alcoholmarket price is increased, it makeshousehold production of vodka moreeconomical than purchasing it — thusspurring in-home sugar consumption.

According to traders, the remain-ing 40% of sugar goes to the industrialfood production sector. The structureof Russia’s sugar demand is changingas the production of sugar-containingproducts grows, e.g., confectionery,canned fruits and jellies, and softdrinks. (No high fructose corn syrupis used in soft drink manufacturing.)

There is a trend among the grow-ing number of urban middle-class fam-ilies to displace traditional homemadeproducts with commercially producedvarieties. According to the U.S. Officeof Agricultural Affairs at the U.S.Embassy in Moscow, the long-termtrend is for increasing the use of sugarin processed and convenience foodproducts and soft drinks, and a reduc-tion in sugar used in home canning.

Russia faces a serious set of popula-tion and health problems that

need to be reversed before a sharpupward movement in national sugarconsumption can begin to emerge.

As noted, Russia has a populationof 141.9 million. But nationally, thecountry is experiencing negativegrowth (-0.467% in 2009, reported theU.S. State Department). A prime indi-cator is that the life expectancy formen is only 61.4 years, compared with74.3 years in the U.S. The reasons forthe dismal data are that Russiansexperience generally poor health care,compounded among men with a heavyincidence of smoking and alcoholismthat leads to premature deaths.

In October 2007, the President ofthe Russian Federation approved ademographic policy for the years 2008to 2025. The program aims toincrease life expectancy, reduce mor-tality, increase the birth rate, andimprove the population’s health. Ifsuccessful, it will take some timebefore the results show up in expan-sion in the consumption of sugar andother foods. �

Photo: Casey Bryl / Amity Technology

Russia faces a serious set ofpopulation and health problemsthat need to be reversed beforea sharp upward movement innational sugar consumption

can begin to emerge.

Above: A Russian sugarbeet field is harvested with American-origin equipment— a Case IH tractor and an Amity Technology beet harvester.


Documents

The Sugarbeet Grower Magazine ~ Vol 49 Number 2 February 2010