This blog first reported earlier this week that Moorhead-based American Crystal Sugar expected its sugar beet payments to plummet to $38 per ton this year. That is down $30 per ton from $68 per ton in 2012.
Crystal Sugar wrapped up its shareholder meetings Wednesday. CEO Dave Berg reported on his company blog that while the situation is not a crisis, "it's darned serious."
Berg reported Crystal Sugar's total revenue would fall more than $300 million in 2013.
We completed our Factory District Meetings Wednesday morning in Fargo. Needless to say, a $30 per ton drop in our beet payment brought out pretty big numbers of shareholders. It would not be accurate to say that the current situation is a crisis, but it’s darned serious. Sugarbeets are the main stream of income for most of our shareholders’ farms. When the total revenue flowing into the Company – and the amount that is available to eventually end up in their beet payment – goes down by more than $300 million, they want to know everything they can about the situation.
A drop of $300 million in revenue means Crystal Sugar will likely see net revenues in the $1.1 billion range for the year, the lowest since 2006.
Crystal Sugar had net revenue of $1.479 billion in 2012, following a record of $1.543 billion in 2011, according to the company's 2012 annual report.
Crystal Sugar has been above $1.2 billion in revenue every year since 2007. The company had revenue of just more than $1 billion in 2006.
On his blog, Berg says the No. 1 concern of shareholders was Mexico and the impact its sugar exports are having on the U.S. market.
"The bottom line is that there is no quick or easy fix, but that everything that American Crystal can do to move things in the right direction is being done," Berg wrote.
(Mike McFeely is a talk-show host on KFGO-AM in Fargo, N.D. He can be reached at email@example.com. Follow him on Twitter @MikeMcFeelyKFGO.)