Sugar Producer

August/September 2020

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14 Sugar Producer AUGUST/SEPTEMBER 2020 Sugarbeet growers and cooperatives in the U.S. are expected to have a stronger financial year ahead, with improved production and high prices for the 2020-21 crop ushering in a recovery from the stressful growing season last year. Many growers and processors suffered through significant financial strains due to extreme weather, market uncertainty and severe crop production losses that plagued the 2019-20 marketing year. A new report from CoBank's Knowledge Exchange division details the market forces and production dynamics that suggest the industry is well-positioned for a financial rebound, as consumer demand for sugar remains high. "Assuming we return to reasonably normal harvest weather this fall, expectations are for a much bigger crop to be harvested for the 2020-21 season," says Tanner Ehmke, manager of CoBank's Knowledge Exchange. "With processors contracting refined sugar at much higher prices, fortunes are expected to turn favorable for growers and processors in the marketing year ahead." The U.S. sugarbeet harvest in 2019 marked the fifth- biggest year-over-year decline on record, dropping 14 percent to 28.6 million short tons. Production in three major sugarbeet-producing states, Minnesota, North Dakota and Nebraska, fell more than 20 percent. Abandonment rates nationwide skyrocketed to the highest level since the Great Depression with 13.5 percent of U.S. planted acres not harvested due to ongoing wet weather issues. Yields also fell to the lowest level in five years due to late planting and poor harvest conditions. Many U.S. sugarbeet growers financed their spring crop planting with crop insurance indemnity payments and financial aid from USDA, while processors struggled with less throughput and lower extraction rates amid high fixed costs. Wet field conditions this spring hampered planting efforts for Rebound On the Solid comeback expected for U.S. sugarbeet industry By Tanner Ehmke Manager, Knowledge Exchange Division, CoBank

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