Sugar company announces it’ll close Sidney operations in April

By: - February 7, 2023 4:17 pm

A tractor harvests sugar beets in this aerial photo near Sidney, Montana (Photo by Larry Mayer | Getty Images).

American Crystal Sugar Company said it’ll start closing a Sidney sugar beet processing facility in April because of “an insufficient supply of sugar beets from local growers.”

But those same growers said that insufficient supply is something that was dictated by the Minnesota-based sugar company, and reduced payments from them have led to farmers growing less.

“The 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,” said the Montana-Dakota Beet Growers Association Board.

In a press release on Monday, American Crystal noted that the high point for contracted acreage in the Sidney area was 45,000 but had shrunk to 18,400 acres in 2022. In 2021, that number stood at 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, the chief operating officer of Sidney Sugars, which is part of American Crystal.

However, beet farmers in the region said the planned reduction was at the sugar giant’s request and plan.

“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 negotiating ensued. The reduction in acres to crop year 2022 was a direct result of that negotiation process,” the beet growers said. “During this time 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.”

They also said that the beet growers were informed of the decision on Monday morning.

Congressman Matt Rosendale weighed in on the closure, hoping the closure of the facility would not be permanent.

“The factory and sugar beet industry have been a large part of Sidney and the surrounding communities for over 100 years. The loss of 300 jobs and millions of dollars in economic impact will certainly be a detriment to our entire region. I am hopeful that this will not be a permanent closure and production can continue in the future,” said Rosendale, a Republican.

The beet growers also said they were never given a clear understanding of how the Sidney-based operations fit into the overall company strategy. American Crystal is located in Moorhead, Minnesota, and is the nation’s largest sugar beet production company.

“The growers of our association have made every attempt to keep Sidney Sugars a viable operation ever since it was purchased by the American Crystal Sugar Company in 2002,” the beet grower said. “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.”

It said that every three years, the farmers have been forced to renegotiate their contract, taking a reduction in payments each time in order to “keep American Crystal Sugar Company’s operation in our area profitable enough for them.”

The farmers also point out that new technologies and new crop yields have helped to keep it sustainable if not profitable.

“Our sugar beet growers will be required to transition into a new way of life,” the beet growers said.

The plant closure procedures, American Crystal said, will begin on April 14. It said the closure will affect 300 workers.

“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,” Rosenau said.

The 2022 crop was completed in December, and the processing will continue through April. American Crystal said all growers will receive their final payment in November this year.

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Darrell Ehrlick
Darrell Ehrlick

Darrell Ehrlick is the editor-in-chief of the Daily Montanan, after leading his native state’s largest paper, The Billings Gazette. He is an award-winning journalist, author, historian and teacher, whose career has taken him to North Dakota, Minnesota, Wisconsin, Utah, and Wyoming.