Colorado’s sugar-beet farmers – battered in recent years by drought and oversupply – plan to increase production by up to 30 percent this year to reap the gains of high sugar prices.
Members of the Western Sugar Cooperative, owned by sugar-beet farmers in four states including Colorado, will devote 25 percent to 30 percent more acreage to the crop this year, the group’s chief executive said this week.
The production jump is in response to high sugar prices resulting from Hurricane Katrina and rising demand, Western Sugar CEO Inder Mathur said.
“We think demand is going to be there,” Mathur said.
Colorado is the nation’s eighth-largest sugar-beet-growing state, but production has declined because of drought, low prices and oversupply. Growers are hoping for a rebound.
“These are much better prices than we’ve enjoyed for a while. You end up with a better net return on your crop,” said Joe Amen, 53, who runs a farm near Hudson with his brother, John.
Sugar beets account for nearly half of the Amens’ revenue. They also grow corn, wheat, barley and sunflowers.
Amen is cautious about predictions. Even when prices are high, he said, foul weather can damage the crop. He said he doesn’t plan to increase beet production but knows plenty of farmers who do.
Refined U.S. beet sugar sold for 34.5 cents per pound in January, up from 23.5 cents a year ago. Katrina knocked out sugar-cane production facilities in Louisiana last fall, reducing sugar supply and sending prices to their highest levels since 1980. They’ve since fallen slightly and are likely to decline further as cane production recovers.
Another factor behind high sugar prices is rising demand, propelled by population growth and the rejection by Americans of low-carbohydrate diets, Mathur said.
“Frankly, people like to eat things that taste good,” he said.
On the world market, rising demand for ethanol, a gas substitute that can be produced from sugar, is pushing up prices.
President Bush has called for increased ethanol production, but it’s unclear whether U.S. sugar crops can be economically used for that purpose.
U.S. tariffs keep sugar prices well above global market levels.
Colorado produced 1.46 million tons of sugar beets in 1999, about 4 percent of the nation’s total, but Colorado production dwindled to 644,000 tons by 2003. With increased acreage and good weather this year, Colorado could have its first 1 million-ton season in six years.
In 2004, sugar-beet sales accounted for about 2 percent of Colorado farmers’ $1.3 billion in crop income. The state’s 425 sugar-beet farmers are mainly in the northeastern part of the state.
Beet growers in Colorado are either shareholders in the Western Sugar Cooperative or are leasing growing rights from shareholders.
The cooperative, which bought out the Western Sugar Co. in 2002 for $185 million, runs the only sugar-production plants in the region.
The acreage that shareholders devote to beets depends on how many shares they own, and the group determines how many acres per share they can plant.
Staff writer Greg Griffin can be reached at 303-820-1241 or ggriffin@denverpost.com.
