Alberta sugar beet growers have finalized a new contract with Lantic (Rogers) Sugar.
ASBG president Gary Tokariuk said April 1 that the two-year agreement will see 28,000 acres of sugar beets planted in southern Alberta this year and next and there will be differences in how payment to growers is calculated.
“We got more security in the price,” said Tokariuk. “It takes a lot of the risk away from the farmers for factory performance and pile storability. So once the crop is in and weighed, we know what we’re going to get. We don’t have to wait on the factory and hope that the beets don’t spoil in the pile.”
This year about 87,000 tonnes of beets were lost due to rotting caused by variable weather conditions during harvest and after piling. Under the existing contract, the growers foot those losses.
However, there is nothing to be done about weather conditions in southern Alberta, where rapid temperature fluctuations in fall and winter are common.
“We were pretty happy with the company, the factory. They made sure everybody got (the beet crop) out, and that was pretty good of them.”
Tokariuk said the new contract is “a whole new concept” in that payment is determined in the spring by the number of tonnes estimated to be produced based on the number of acres planted.
The variable comes in the sugar content of the beets. Payment will rise if there is a higher sugar content in that year’s crop. The norm is 17.5 percent sugar and if that is the case, Tokariuk said the guaranteed price would be $53.50 per tonne.
This year’s crop had an average sugar content of 17.7 percent, one of the highest in recent memory. Had the new contract applied, growers would have received about $54 per tonne, as opposed to the $49.50 they received this year per tonne of beets delivered.
“We got more security in the price, which I think most farmers will be happy about,” Tokariuk said. “Risk mitigation is the biggest thing … we’ve protected farmers quite a bit on this.”
There is some loss of upside potential. For example, if the world sugar price rises, growers wouldn’t see a change in price paid by the company under the new contract terms.
Past ASBG president Arnie Bergen-Henengouwen was the lead negotiator on the new contract, a process he began two years ago. Tokariuk offered praise to him because negotiations were somewhat prolonged due to the need for agreed contractual language under the new payment concept.