fedgazette

How sweet it is

Published May 1, 2005  |  May 2005 issue

Although overshadowed by commodities like wheat and corn, sugar beets are a major commodity in the Ninth District. Production is concentrated in the Red River Valley (which straddles the border of Minnesota and North Dakota) and eastern Montana. Nearly half of all sugar beet tonnage nationwide is grown in these counties. The sugar produced from those beets amounts to almost 27 percent of all sugar produced in the United States, or about 23 percent of total sugar consumed once imports are factored in. In addition to being the biggest sugar beet-producing region in the country, the Red River Valley is also the fastest growing in terms of production.

Given the nature of U.S. sugar pricing, growers can reap additional profits by processing the sugar themselves, which they do in the district through grower-owned cooperatives: the Minn-Dak Farmer's Cooperative in Wahpeton, N.D., the Southern Minnesota Beet Sugar Cooperative in Renville, Minn.; and the biggest by far, the American Crystal Sugar Company in Moorhead, Minn.

In 2003, these cooperatives grew some 14.5 million tons of beets on 776,348 acres. They operate seven processing plants in the Red River Valley and one more in Sidney, Mont. Of these eight plants, six are run by American Crystal. The Southern Minnesota co-op also recently inked an exclusive deal to sell beets to Cargill for processing in a facility in Ohio.

Both growing and processing are drivers of the regional economy. A study by North Dakota State University found that sugar beet production, processing and marketing in Minnesota, North Dakota and eastern Montana generated $1.1 billion in direct economic impacts in 2003, with the equivalent of more than 2,600 full-time workers employed in the industry. Of that, 62 percent was generated in Minnesota, 32 percent in North Dakota and 6 percent in Montana. Processing and marketing accounted for $401 million of the total impacts, with the remainder accounted for by production.

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