World sugar futures are at their highest levels in 25 years, but that's not doing Red River Valley sugar beet growers much good.
The area's two sugar beet cooperatives -- Moorhead-based American Crystal Sugar and Wahpeton, N.D.-based Minn-Dak Farmers -- sold most of their 2005 crop last summer before prices jumped.
"That's when our buyers wanted it," said James Horvath, president of American Crystal Sugar, which has about 2,900 farmer-shareholders.
Minn-Dak, with about 500 farmer-shareholders, also sold most of its 2005 beets before sugar prices jumped, said Dave Roche, its president.
Area sugar beets are planted in the spring and harvested in the fall.
ADVERTISEMENT
Sugar futures soared as high as 19 cents -- and are now at about 18 cents -- per pound of raw sugar. They were 9 cents a pound a year ago and under 10 cents for most of the past decade.
That helped push the price of refined sugar from about 24 cents per pound last summer to about 38 cents now, said Ron Sterk, an assistant editor with Baking and Milling News, which tracks refined sugar prices.
Sugar prices are rising in part because Brazil, the leading sugar exporter, is processing more of its sugar into ethanol, said Phillip Hayes, director of media relations for the American Sugar Industry, a Washington, D.C.-based trade group.
Dry weather in Brazil and Thailand, another top sugar producer, also is a factor, as is damage to the U.S. sugar cane industry caused by Hurricane Katrina, Hayes said.
Speculators hoping to make money off sugar have pushed up prices, too, he said.
The cost of a pound of sugar in U.S. supermarkets has held steady at about 43 cents since 1980, and that's unlikely to change, Hayes said.
U.S. sugar policies are designed to keep prices stable in the supermarket, he said.
It's unclear how long world sugar prices will remain strong. How much sugar Brazil exports and how much it converts to ethanol, a fuel blended with gasoline, will play a big role, sugar industry officials say.
ADVERTISEMENT
Area sugar beet producers hope prices are still good when it's time to sell this year's crop, Horvath said.
Dave Kragnes, a Felton sugar beet farmer, said area growers were disappointed by not capturing higher prices for their 2005 beets.
But he's optimistic growers will benefit this year.
"I'm a farmer. Every time I put seed in the ground I'm optimistic," he said.
(Jonathan Knutson writes for The Forum of Fargo-Moorhead, a Forum Communications Co. newspaper)
