More Questions than Answers

By John Riskey, Roger Delage and Gayln Olson

Crystal Sugar spokesman Brian Ingulsrud raised more questions than he gave straight answers in a recent interview with AgWeek  (April 26).

How many replacement workers are there?

Ingulsrud told AgWeek that Crystal now has a 50-50 split between local workers and those hired by Strom Engineering of Minnetonka, Minn., and that the company has hired 800 local workers. So Crystal Sugar is paying 1,600 “replacement employees” to do the work of 1,300 laid-off workers? And this reduces labor costs?

How much have production costs increased?

The AgWeek reporter asked Ingulsrud to comment on a Minnesota AFL-CIO news release that said processing costs have more than doubled since the lockout began. According to the news release, a review of the six months ended Feb. 29, 2012, compared to the same period last year, revealed (among other things) that production costs shot up 200 percent. While analysis of the company’s most recent quarterly report proves this figure to be accurate, Ingulsrud stated the 200 percent cost increase was “not in the ballpark.” But he declined to name a figure. Does Ingulsrud have additional data on costs that were not included in the quarterly report? If so, he should provide this information to shareholders so they have a clear picture of just how the company is performing. How much have production costs increased over the last six months? And when can shareholders expect these costs to start decreasing?

How much is ACS paying to buy sugar?

Ingulsrud ignored altogether another fact noted in the AFL-CIO release and the Ag Week story. In quarterly reports since the lockout began, Crystal Sugar has withheld detailed figures that would reveal how much sugar the company has had to purchase. Before the lockout, ACS’s quarterly reports included the precise amount of “costs associated with purchased sugar.” The last two quarterly reports bury those costs within the “cost of sales” which happen to have increased $137 million for the six months ended Feb. 29, 2012, as compared to the same period last year.

Why is the company trying to cover up the true costs of the lockout by concealing the amount it has paid for its inability to produce enough saleable sugar?  How much is the co-op paying to buy sugar from other producers? And how does that compare to previous years? Again, Crystal Sugar should be sharing this information with its shareholders.

Why Crystal $59 and Minn-Dak $72? Both had smaller crops.

Finally, Ingulsrud tried to explain why ACS’ per-ton beet payment to growers is projected at only $59, while Minn-Dak Farmers Cooperative of Wahpeton, ND is projecting a payment to its growers of $72.72.

This, as the Minnesota AFL-CIO has pointed out, is a departure from the last seven years. When comparing final sugar beet payments from 2004 to 2010, on average, payments to Crystal Sugar shareholders were nearly seven per cent higher than payments to Minn-Dak shareholders. They are now projected to be 23% behind Minn-Dak!

Ingulsrud told Ag-Week that the company’s 2011 crop was quite a bit smaller than the previous year and that had “a negative impact” on the price that’s paid out, since the costs were spread over a smaller volume. But Ag-Week noted that Minn-Dak also had a short processing campaign that ended in mid-March, based on an extremely short crop, averaging 16 tons per acre, so its higher per-ton payment was also applied to a smaller crop.

So why really is Crystal’s payment only $59? Could it be that the union workers at Minn-Dak are more efficient and productive than the inexperienced replacement “workers” who are trying to operate ACS factories? Farmers, how long are you willing to put up with this? Do you look forward to another year of lower prices and poor productivity? Are you sure that staffing your factories with “permanent replacements” is a good idea?

Riskey is president of BCTGM Local 167G. Delage is president of BCTGM Local 267G, and Olson is president of BCTGM Local 372G.

Letter from Deb Ambuehl to ‘the elite beet farmers of the Red River Valley’