Sugar processor cuts contracted beet acres

Lantic Sugar | Alberta growers question reasons given for reduction to 22,000 acres

Lantic Sugar, which operates a sugar beet factory in Taber, Alta., reduced contracted acres in Alberta last week to 22,000 acres, down from 24,000 last year and 30,000 in 2012.

Growers greeted the reduction with dismay.

It is late in the season to sign contracts for other high-value crop commodities, and Alberta Sugar Beet Growers executive director Gerald Third said growers find Lantic’s reasons for reduction hard to accept.

Doug Emek, general manager of Lantic’s Taber operations, said in an April 7 letter to beet growers that the decrease was due to recent loss of 24,000 tonnes in sales to a major bottler. As well, he said a U.S. sugar industry anti-dumping claim made against Mexico, if successful, would stop Mexican imports of sugar to the United States and flood the Mexican market.

“This in turn will eliminate any possibility of sales in 2014 or 2015 (and perhaps longer) of Taber sugar to Mexico,” Emek said in the letter.

Lantic has shipped up to 15,000 tonnes of sugar annually to Mexico in recent years.

Third said Lantic’s one-year contract with the bottler expired so sales losses this year should have been anticipated.

However, his real angst relates to the explanation about Mexico.

He said Canada’s two sugar processors, Lantic and Redpath, sell sugar to Mexico as a back door method of marketing to the United States. Tariff rate quotas prevent sales by the more direct route.

“To me, it’s just preposterous. We have tariff protection for Canadians, to protect Canadian agriculture and we have these two companies that are just exploiting the hell out of this thing,” he said.

“And they’re so brazen that they’re dumping sugar into Mexico and then they’re reducing the Canadian volume to the detriment of Canadian growers, Canadian consumers. And they’re justifying it. To me it seems hypocritical.”

Emek said acreage reductions are not unusual.

“It’s no different than any other commodity,” he said.

“Most other crops, the acreage fluctuates from year to year. I’m not quite sure why there is such interest in sugar beets like this because it happens with other crops as well.”

He said changing events affected the timing of the announcement for reduced acres.

“Some of the factors only came to light recently,” he said.

“It’s not our preferred way of announcing a change in acreage, but we also can’t ignore the realities of our marketplace.”

Emek also said last year’s large crop and the resulting carryover were additional factors in the acreage adjustment.

However, Third said he doesn’t think the surplus explanations are valid.

“I said to them, ‘how can you have a surplus? You import 1.2 million metric tonnes of sugar and we produce 85,000 tonnes. You should be able to absorb 100 percent of that into the Canadian landscape and it never affects you.’ Why should Canada be reliant on a third world country to dump sugar into, as a sales strategy? To me, it’s just unconscionable.”

Third said sugar produced in southern Alberta makes up eight percent of total Canadian volume.

Processors import partially refined sugar from other countries, then process it further and label it as domestic product. That prevents them from maximizing domestic sugar production.

“They’re not even producing this sugar for sale in Canada,” he said.

“They’re sacrificing Canadian sugar so that they can import foreign sourced sugar, and if they can’t sell Canada’s sugar off shore, then they don’t want it. To me, it’s absolutely wrong.”

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