Three-year deal signed for sugar beets

What could have been a sour spring for local beet growers got a lot sweeter last Wednesday afternoon.

At about 2 p.m. that day, a three-year contract was struck between the Alberta Sugar Beet Growers Marketing Board and Lantic Sugar Inc. The deal follows up on the one-year pact signed last year.

According to Rob Boras, the newly-elected president of the marketing board, the time was right to get the deal completed.

“We sat down at the (Lethbridge) Lodge and felt time was of the essence,” he said, and added it is nice to have a longer-term deal in place this time. “It’s always better to have it three years because it takes a lot of time and effort and money to put together.”
Boras added it is a short turnaround from last year to this year, as the board has operated in a near-constant cycle of negotiation in the last few years, with last year’s one-year deal.

“I guess the way we looked at it was it was something the board had to do last year. We didn’t want to lock into a contract that didn’t give us profitability.”
With many of the same board members on hand this year that helped negotiate the last contract, Boras said the process benefited from that continuity.
“There were several directors on the board that really stepped up to the plate.”
Now those directors, and the rest of southern Alberta’s beet growers, can rest a little easier, knowing beets will be grown in this area for another three years.
Boras added the deal provides stability, and piece of mind for both the growers and Lantic Sugar Inc., as everyone now knows at least a ballpark figure as to how many acres of beets will be grown this season.
“We’re going to be looking at a minimum of 30,000 acres this year. It could go up but we have been guaranteed 30,000 acres to start.”
What could impact that in the future is the new Flexible Solutions plant in Taber, which should be up operational later this year, according to the company’s CEO, Dan O’Brien.
“We’re installing the equipment now and we will be doing some test runs in the summer and then we should be up and running in the fall,” said O’Brien, who added the facility will begin by using 2,000-5,000 tonnes of sugar equivalent product from Lantic Sugar Inc. “It doesn’t affect their acres quite yet — it’s just a nice extra sale.”
Boras said the marketing board is not directly dealing with Flexible Solutions, and added at this point, the new company in Taber is simply taking sugar products from Lantic.
He went on to say down the road, Flexible Solutions will help in moving volumes of sugar produced here in southern Alberta, which should also benefit from the new three-year deal.
“What we have done here in guarantee them (Flexible Solutions) at least three years of the feedstock they came to Taber for, and I think that gives them a bit of piece of mind.”
Boras added he is hopeful the Flexible Solutions facility will take off in the future.
While the success of Flexible Solutions in the future can only help the local sugar industry, Boras said the big thing now is a new deal is done, and everyone in southern Alberta can get back to the business of producing sugar.
“There are a lot of livelihoods involved in this, so we worked really hard to pull together a contract we could live with over the next three years.”
He added the focus was to negotiate a deal which was good for both sides, to ensure the profitability for both the growers and for Lantic. However, for the growers specifically, there is one important element in the new deal. Boras said a clause exists in the new deal that allows for growers to experience an upside, indexed to the world sugar price. He added growers will not simply be tied into a fixed price for the life of the contract.
“If we see something going up there, we have some upside potential which we didn’t have before.”
Boras added that upside potential was key for growers in this contract, and paved the way for a longer-term agreement.
Andrew Llewelyn-Jones, agricultural superintendent at Lantic, was also pleased to see the three-year agreement.
“For everybody from the company and the growers, it shows we are committed to keeping the industry in the area.”
He added the deal also gives Lantic the stability it requires to invest in improvements to the Taber factory over the next few years.
For Boras and the marketing board, now that the new deal is in place, a shift in focus will take place to general promotion of the sugar industry. He added that will be done through meeting with federal, provincial and local political leaders.
“They need to know what this industry is all about and where we stand.”
Boras and the rest of the board will also focus this month on hiring a new general manager for the organization, to replace the departed Bruce Webster, who served as GM for 16 years.
“Without a manager, there is a void we need filled, and it’s in the hands of a hiring committee, and we’re receiving applications every day.”
Once that manager is in place, they will work with Boras and the board to prepare for an important legal battle in 2010. According to Boras, that is when the Canadian sugar industry will have to defend its tariff that protects the domestic sugar market. The tariff has to be defended every five years.
“We’re in the early stages of preparing for that. We will need to hire a lawyer to help take care of that.”
Closer to home, growers in Taber will likely be out in the fields, weather permitting, in early April. Boras added growers in his area, near Picture Butte, are typically out about 10 days to two weeks after their Taber counterparts.
“That’s why we needed to get this deal done,” said Boras of the impended seeding campaign. “There’s other crops that compete with us, so that’s why we felt we needed to get this done.”
Production-intention forms will soon be coming to all sugar beet quota holders and according to Llewelyn-Jones, Lantic is now in the process of bringing in seed. The company will probably start the contracting process the first week of April.
Before then, Llewelyn-Jones added Lantic will host grower-information sessions March 24-27 in Taber, Burdett, Vauxhall and Lethbridge

Click to read full story
source: vauxhalladvance