Sidney Sugars to Begin Closure Procedures in April

February 6, 2023 - At the close of 2023 acreage contracting, the growers of the Montana-Dakota Beet Growers Association showed there is no longer adequate interest in growing sugar beets to sustain operations at Sidney Sugars Incorporated. Association members and all employees of the beet sugar factory were informed today that plant closure procedures will begin on April 14, 2023.

In a letter obtained by Western Ag Network sent to Sidney Sugar employees, the beet processing plant will begin closing operations on April 14, 2023.

The company cites that due to an ongoing insufficient supply of sugar beets from the local growers, it has become financially unsustainable to continue operating the nearly 100-year-old business. In the 1990s, contracts for sugar beets with the local growers had reached as many as 45,000 acres.

“Last year there were only 18,400 acres contracted. The year before that, 30,774. With only 19,500 acres of sugar beets offered in the region for this coming spring, the Sidney operation is simply unprofitable,” said Steve Rosenau, American Crystal Sugar Company Vice President of Agriculture and Chief Operating Officer of Sidney Sugars, Inc.

But, sugar beet growers like Don Steinbeisser, Jr. said that after multiple years Sidney Sugars cutting back on contracts, farmers like him, have had enough. 

"Back in the early 2000s, Imperial Holly Factory in Sidney was bought by American Crystal and they've been running factory," said Steinbeisser. "We've been raising beets for them. But every so many years, we have to negotiate a new contract. We've been taking cuts and what the farmers have been getting paid. It's to the point now where you can make just as much money raised another crops without having the headache and all the expenses of raised sugar beets. We wanted to keep raising beats because we like the factory. We've been doing it for over 90 years as a family and it was important important to us. Over the last five years, we've kind of just come to the conclusion that if they took another cut in the contract we were going to be gone. And they did so we quit. Now they can't get enough of acres to run the factory."

In a statment, the Montana-Dakota Beet Growers Association said: "The growers of our association have made every attempt to keep Sidney Sugars a viable operation, ever since it was purchased by American Crystal Sugar Company in 2002. Unfortunately, the sugar beet growers of our area have never had a clear sight of how we fit into American Crystal Sugar Company’s future. For 20 years, the growers have had to negotiate a new contract with American Crystal Sugar Company every 3-years on average. During these negotiations, the sugar beet growers of this valley have been required to take substantial reductions in payments in order to keep American Crystal Sugar Company’s operation in our area profitable enough for them."

Steinbeisser believes many farmers have or will be looking to plant different crops, but others may just retire from production agriculture. 

"Some of the guys are at that age where they are just going to retire," Steinbeisser said. "Some will do other things. Over the last 10 years have been a lot more people going back to feeding cattle, building feedlots again and things like that. So they've kind of seen the writing on the wall. A lot of people have been slowly adjusting. So, you know, if you don't have to own all that beet equipment, and you can raise the same crop using the same combine used for wheat, and barley for corn and soybeans it cuts a lot of costs out. I think most people will be able to stay in farming."

"It's going to it's going to affect a lot of livestock guys because of all the beet pulp that was being sold," Steinbeisser added. "They're going to have to talk to farmers about corn silage or something else to replace that with. And the jobs at the factory, in Sidney there's all kinds of oil field jobs right now. So I don't see a whole lot of trouble with that, but, you know, that's outside work to compared to be an inside." 

While processing of the 2022 crop was completed in December, cleanup work will continue in the factory until April. Warehouse operations will continue through the summer. The factory has typically employed a total of 300 employees. “Employees will receive severance packages and we have provided a number of resources to assist them with job searches, including offering opportunities to join other American Crystal factories in the Red River Valley,” said Rosenau.

 "American Crystal Sugar Company has referenced that 30,774 acres were grown in crop year 2021," said the The Mon-Dak Beet Growers Association responded. "That marked the end of a contract period and a new negotiation ensued. The reduction in acres to crop year 2022 was a direct result of that negotiation process. During this time the growers were told by an American Crystal Sugar Company’s executive that we would be required to take another large cut to our payments and we should expect continued cuts in our subsequent contracts."

The Montana-Dakota Beet Growers Association Board full response: 

For almost the last 100 years, the sugar beet producers in our area have been recognized as some of the best sugar beet growers in the nation. We have always taken pride in growing the highest quality crop possible every year. We, the grower’s, are disappointed in American Crystal Sugar Company’s decision in closing our local Sidney, MT factory.

The growers of our association have made every attempt to keep Sidney Sugars a viable operation, ever since it was purchased by American Crystal Sugar Company in 2002. Unfortunately, the sugar beet growers of our area have never had a clear sight of how we fit into American Crystal Sugar Company’s future. For 20 years, the growers have had to negotiate a new contract with American Crystal Sugar Company every 3-years on average. During these negotiations, the sugar beet growers of this valley have been required to take substantial reductions in payments in order to keep American Crystal Sugar Company’s operation in our area profitable enough for them.

During these years, the willingness of our area’s growers to adopt new technologies has risen yields to deliver more than enough production to keep the factory profitable. This adaptation of technology by our growers, and the sacrifices required of them in contracts, is the only reason we have been sustainable through these years of new ownership.

American Crystal Sugar Company has referenced that 30,774 acres were grown in crop year 2021. That marked the end of a contract period and a new negotiation ensued. The reduction in acres to crop year 2022 was a direct result of that negotiation process. During this time the growers were told by an American Crystal Sugar Company’s executive that we would be required to take another large cut to our payments and we should expect continued cuts in our subsequent contracts.

The growers of this association recognize that American Crystal Sugar Company’s presence in our area has come and gone, but our sugar beet grower’s dedication to this region will continue for generations to come. We would like to thank our local Sidney Sugars employees for their years of dedication to Sidney, MT. Our Thank-You’s do not end there, the businesses and people of our community have been the bedrock that has held up and continue to hold up many of our operations. Our sugar beet growers will be required to transition into a new way of life and we ask for your continued support.

We were just informed by American Crystal Sugar Company of the closing this morning, and while this news is still fresh in our hearts, we understand the importance of a statement from our board. We hope to give you further comment in the future.

Sincerely,

Montana-Dakota Beet Growers Association Board

Source: Western Ag Network, Sidney Sugars Incorporated, Montana-Dakota Beet Growers Association Board