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How sweet it is-Like the product itself, the sugar industry in Wyoming and Montana crystallized in 2002.

A new farm bill and new owners across the region have re-arranged the landscape. And, despite a tough growing season with late spring frosts and a shortage of water in some areas, the shift in ownership and emphasis is all for the better, say officials now in the midst of the sugar beet processing campaign.

By JIM GRANSBERY
of the Gazette Staff

The Wyoming Sugar Co. LLC was born in June when growers and local investors took over the Worland plant owned by Holly Sugar Corp. Cal Jones, a former Holly executive, is president and CEO of the new entity.

"Diligent growers and businessmen here persevered," Jones said. "It has been rewarding. The transition has gone well with such a reliable group of employees."

Imperial Sugar Co., the parent of Holly, went into Chapter 11 bankruptcy at the beginning of 2001. The reorganization went quickly, and since then Imperial has moved to divest itself of many of its factories, instead focusing on marketing.
A rough start

Jones said this crop year got off to a rough start with a late freeze and replanting. A water shortage also stunted the growing season.

"We kept the crop as wet as possible, but there was a lack of water, especially in the outlying areas," he said. The growers harvested 12,000 acres, down from the earlier contracted 16,000. Jones said the tonnage per acre is about 19.5, and the sugar content is running a little above average at 17.25 percent.

"It’s not the volume we wanted, but we’ll be cooking until Christmas," he said.

Beets are cooking with a new operator this fall in Torrington, Wyo., too.

A former Holly plant, Torrington is leased by the Western Sugar Cooperative from American Crystal Sugar Co., which bought it and the Holly plant in Sidney, Mont., in October.

The new owner and operation schematic is a bit confusing, admitted Rick Dorn, but all parties got what they wanted, he says.

Dorn, of Billings, chairman of the Western Sugar Co-op, said leasing the Torrington plant gives the co-op an additional marketing allocation under the farm bill, eliminates a competitor, provides a packaging operation, and adds storage capacity.

"That’s a good factory and community," he said.

The lease of the Torrington operation also complements the plans of the co-op, which, after a two-year effort, bought Western Sugar Co. this spring. The grower group bought six factories from British sugar giant Tate & Lyle., which is also contracting its worldwide operations.

The Western Sugar Co. had plants in Billings, Lovell, Wyo., Greeley and Fort Morgan, Colo., and Scottsbluff and Bayard, Neb. On Wednesday, the co-op announced its initial payment to 1,200 farmers for the 2002 beet crop would be more than $78 million, about $31 per ton.

Because farmer subscription to the co-op was soft in Nebraska, closing Bayard and leasing Torrington allowed the co-op to eliminate a competitor and pick up the acreage and marketing allocation it needed, Dorn said.

"This was a valuable strategic move," he said.

The co-op will honor the contracts Torrington farmers had with Holly, Dorn said, and they will be offered membership in the co-op next year.

"The right things are happening," said Inder Mathur, president and CEO, of Western. "There were three motivated parties. It makes everyone stronger."

Western’s lease of the Torrington plant runs for 25 years and can be extended for another 25, Mathur said.

American Crystal Sugar Co., of Moorhead, Minn., is a 3,000-member co-op farming 500,000 acres in the Red River Valley and upper Midwest.

ACS saw an opportunity and took it, said Joe Talley, the operations chief for the new owner in Sidney.

"The industry has been in flux and financial stress," Talley said. "It was a good opportunity to be a buyer rather than a seller. This makes sense for everybody.

"It had to be difficult for Holly to sell Sidney, but it had to be a package for us," he said. "Sidney fits our geographic area and its farmers are the same as ours."
Future proposal

Sidney growers will be under contract to Sidney Sugars, Inc., the new name for the operation, Talley said. The growers will not become part of the co-op immediately, but ACS would entertain a proposal sometime in the future.

"We did not say no or yes," he said. "We bought the plant on the assumption they would not. But if they present a proposal in the future, we’ll talk about it."

In Billings and Lovell, the transition to a grower-owned company has gone smoothly.

About one-third of the crop was replanted because of a spring freeze, said Tony Zitterkopf, ag manager for Western. But the harvest went well and the beets went into the storage pile in good condition. The cool weather has been ideal, so far.

Tonnage and sugar content are down, but that is expected because of the freeze and drought conditions this year, he said.

Copyright © The Billings Gazette, a division of Lee Enterprises.

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