Alta. beet growers, Rogers Sugar reach four-year deal

Sugar beet growers in Alberta will have a growing season in 2015 after all, having reached a last-minute deal with Canada’s lone sugar beet processor.

Montreal-based Rogers Sugar on Wednesday announced its Lantic subsidiary has reached a new four-year agreement with the Alberta Sugar Beet Growers Association to supply the company’s beet sugar plant at Taber, Alta.

The deal calls for a target of about 22,000 acres to be planted “over the next few days,” which under “normal” growing conditions should be processed into about 80,000 tonnes of refined sugar, Rogers said.

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Further details weren’t released in Wednesday’s announcement. In previous years, Rogers has said its agreements with the grower group involve a fixed-price payment formula for all sugar derived from the beets, plus a scale incentive when world raw sugar values rise above a certain price level.

Rogers, in its second-quarter earnings report released April 30, was still uncertain a deal would be reached, though it said at the time the parties were in talks with the aim of reaching a deal within the following 10 days.

The company’s previous three-year agreement with the 400-member Alberta growers’ association expired at the end of the 2014 growing season.

Rogers said April 30 the Taber plant’s customers would be supplied using “inventory carryover from the current crop” and “available idle capacity” at Lantic’s refinery in Vancouver, if a new agreement with the Alberta growers wasn’t reached.

The Vancouver plant is considered Rogers’ “swing capacity” plant, using refined cane sugar to replace any shortfall in beet sugar production from Taber.

The Taber plant’s sugar beet slicing campaign from the 2014 season was completed in February, with Rogers estimating total beet sugar production at about 85,000 tonnes.

At 22,000 acres, the expected beet area in 2015 is roughly the same as the company’s 2014 target. Rogers said its 2014 target was down from the previous year, based on a large estimated carryover of beet sugar inventories into 2014 and on the company’s sales outlook for fiscal 2015.

The plant’s refined sugar output from the 2013 beet harvest was pegged at 95,000 tonnes, down about 25,000 tonnes from the previous year “in line with the lower acreage requested.”

The Taber plant — Canada’s only producer of Canadian-origin refined sugar — makes granulated sugar, icing sugar and liquid sugar and can produce up to 150,000 tonnes of refined product per year.

Rogers, in its Q2 report April 30, said its Taber and Vancouver plants saw an increase in operating costs from the year-earlier Q2, as a result of “poor operating performances” due mostly to “beet deterioration.” — AGCanada.com Network

 

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