Growers Pushing for Strengthened Sugar Policy in Farm Bill
LONGMONT, CO., May 14, 2024 — Paul Schlagel's family was one of the many Volga German families who came to Colorado more than a century ago and grew the crop they knew: sugar beets. Their first sugar beet crop in northern Colorado was harvested in 1911. His father purchased the farm from his mother and began farming on the current farm in 1963. Next year will be his 50th crop.
The operation also includes Coors barley, corn and alfalfa on all irrigated farm ground. In recent years, he said they have invested a great deal into irrigation and have transitioned from flood irrigation to mostly sprinklers.
"It's made us better farmers," he said. "That was always, it seems like, a shortcoming to get things irrigated properly and our crop yields have increased substantially since we undertook that."
Schlagel farms near Longmont, Colo., where he is the fourth generation to do so. His son returned to the operation at the encouragement of his wife, Vicki, and his son's three children represent potentially the sixth generation of the operation.
He said in the years they were raising their son, Scott, he and Vicki didn't think there was feasibility to even encourage their son to return to the farm. He worked for fertilizer and seed companies following his college graduation.
"After several years, he didn't seem like he was very happy and it was my wife that went to him and asked if he wanted to come back to the farm, and he said yes," he said. "Once he came back to the farm, we've tried to increase the technology side of the business, which is right down his alley. It's costly to do that, but he has shown me the advantages in keeping up with the technology and I hope we can continue because there's so many more things on the horizon we can take advantage of once they become more mainstream."
CHALLENGING TIMES
Farming along the Front Range has its challenges and Schlagel jokes that they farm in the suburbs. He has four brothers, and he is the one who farms.
"Before we started putting up sprinklers, about a decade ago, we made a commitment to keep the farm operating at least through our generation and the next generation can figure out what they're going to do after that," he said. "For the long term, it's going to be in production."
With a combination of deeded and leased acres, the threat of expanding development looms large, but their current acres will allow them to continue to invest in technology and other efficiencies to make the most of each of those acres.
The chairman of the American Sugarbeet Growers Association Biotechnology and Research Committee, he was one of 75 other sugar beet and sugarcane farmers from across the U.S. who recently met with lawmakers to encourage the inclusion of strengthened sugar policy in the long-awaited farm bill. He said sugar policy is due for a few changes after remaining static for over 20 years.
"Nobody grows sugar better than we do in the United States," he said. "We do it all without taking any taxpayer dollars — we've done that as long as I can remember, and we plan to do that into the future. We just rely on a loan program to make our policy work with importing some sugar."
U.S. sugar growers are able to meet 70% of the country's demand with the remaining supply imported. He said U.S. sugar growers can grow sugar better than anywhere else in the world, though they can not compete with foreign governments.
"There's billions of dollars in foreign subsidies to sugar industries in Brazil and Thailand and other countries," he said. "They dump the excess on the world sugar market which depresses that market to about half of what the cost of production is. It's a fictitious market, and it's used sometimes to argue with us about sugar policy but it's a lame argument."
Sugar is one of the commodities nimble enough to pivot during COVID, demonstrating the value of the supply chain. Schlagel said the normal sugar customers stopped buying because restaurants were closed, and people were staying home. The industry pivoted, bagged bulk sugar in 4-pound bags, and added 45 million bags. When shelves were empty, sugar was still on the shelves, demonstrating the industry's importance and ability to change and grow.
WESTERN SUGAR HISTORY
Schlagel said the new farm bill's sugar policy needs to be strengthened by increasing the loan rate to make a safety net for farmers and Western Sugar. About 20 years ago, the growers purchased Western Sugar to keep it operating.
"There wasn't enough margin to keep a manufacturing business and the growers in business," he said. "In 2002, the growers mortgaged their farms and purchased the company. Today, we need to make sure that sugar policy is maintained so when growers have to go to the bank and secure a loan to operate with, they can be assured that we'll remain in business. And the same with Western Sugar Coop."
The Western Sugar jobs are all union jobs that pay well with benefits and, he said, most importantly are in rural areas of the state and country and help keep rural areas thriving.
He said input costs are a constant stress as well as attracting affordable and dependable labor. Schlagel doesn't employ extra labor during planting or harvest, though they employ two full-time positions. One of those positions is currently open, and he said it's been difficult to attract applicants at all.
In their own cost analysis, he said their costs are 50% higher than three years ago. Taking advantage of efficiencies to increase yields helped, but to continue to operate, the sugar price needs to remain steady.
"That safety net is too close to the ground," he said.
Schlagel said a beet plant in Sidney, Mont., closed this past year due to the lack of interest in growing sugar beets. He said that lack of interest stems from the risk associated with growing beets and the risk involved and the price of inputs.
"It's quite a bit harder to grow sugar beets than to grow corn," he said. "It just wasn't there and that factory is closed and one in Texas closed due to a lack of water, in part. Weather and the cost of doing business contributed to that sugar cane facility closing."
Western Sugar Cooperative growers grow on contracts, which in 2002, one contract represented a commitment to grow one acre of sugar beets. Over time, it has adjusted to one share representing a commitment to grow 0.85 acres.
"Along the Front Range we have lost a lot of acreage to urbanization and we would have a difficult time to grow our acres so that puts some acres out there to lease," he said. "In the past 10 years, my son and I have leased 100 acres to add to what we own, but that may go away too as we lose some of our rental ground."
ADDING YOUNGER GROWERS
The challenge for Western Sugar, he said, is to maintain value to the acres and to attract younger growers to take over some acres moving forward.
"It's not going to happen along the Front Range," he said. "These acres will have to move to the east and the north a little bit."
Cold weather this year has forced many growers, especially in Montana and Nebraska, to replant substantial sugar beet acres this year.
"Even in Colorado, it seems like we're a month late in our weather," he said. "It's been really cool. We've had adequate moisture, not a lot of moisture, and we've had some wind that has been really hard on our crops."
He said this year's sugar beets have germinated, though the wind has taken a toll on them. Weather, he said, is still the top concern when growing crops. He speculates about 70% of Colorado sugar beet acres are insured. Given the cost analysis and having to replant every three to four years, the insurance is a good decision. Cold weather during harvest is also common, making crop insurance crucial.
The remnants of the sugar factory in Longmont remain today, after its closure in the 1970s, but the commodity remains an important piece of agriculture's history and a major economic driver. In Colorado, sugar beets contribute nearly $300 million to the economy and create and support 4,428 jobs. The 24,500 acres of sugar beets yield 790,700 tons each fall.
"We have a lot of work yet to do to get a farm bill passed," he said. "We've heard some good things coming out of D.C. lately, so we'll keep our fingers crossed and keep working at it. We have things to look forward to in the sugar business."
Source: Rachel Gabel, The Fence Post Magazine and Western Ag Network
