A complex mix of problems in domestic and international markets has soured the future for Manitoba sugar beet growers.
Last week, Rogers Sugar Ltd. announced it will close its Winnipeg plant, which has been buying beets from farmers since 1940.
President David Elliott said parent company B.C. Sugar has been forced to compete more fiercely for the 1.1 million tonne Canadian market.
A competitor, Redpath Sugar, which owns a sugar cane refinery in Toronto, expanded its capacity this year, pushing total industry capacity to 1.3 million tonnes.
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The Winnipeg operation was the smallest and oldest of Rogers’ six plants. It also owns Canada’s other sugar beet plant in Taber, Alta.
“There’s just not been enough money in the pot for the growers and the company to share,” Elliott told reporters.
The final straw for the plant came last year when the United States put a quota of 22,000 tonnes on sugar imports, Elliott said. The Winnipeg plant had sold more than half of its 50,000 tonnes production into the lucrative U.S. market each year, where prices were roughly double the world price.
While the company snapped up most of the U.S. quota in 1995, it only got 5,000 tonnes this year.
“The loss of the U.S. business cannot be overcome,” Elliott said. “Without the U.S. access, there isn’t any economic value or hope for this facility.”
The plant had a full-time staff of 83 and a payroll of $4 million. A provincial task force last year estimated the industry to be worth $100 million to Manitoba.
Elliott said the company realized in December the U.S. would not likely accept more sugar in the near future, when a North American Free Trade Agreement panel said the Canadian government could keep its import tariffs on dairy and poultry products. Under the free trade agreement, the U.S. government is allowed similar protection for its sugar industry and could make similar arguments if Canada challenged its import quota.
“Depending on whether you’re a Canadian or whether you’re a Manitoban or whatever, there were many days when I was pulling for the U.S. to win this one,” said Elliott, referring to the panel decision.
“That would have allowed us to at least have a shot of getting back into the United States with our refined sugar.” He said the fight to get more market access isn’t over.
“I believe that the only way that we’re ever going to have this thing resolved for sugar to get into the United States is that the parties are both willing to sit down and trade something off.”
