They remember getting paid in cash for the crop from one of the vaults, some of which are two stories high. Some remember being told by their grandmothers to make sure the money wasn't spent in one of the neighborhood bars, Smith says. Unlike corn or wheat, which a farmer can haul to the elevator or feed lot of his choice, beets are a contracted commodity and since they are bulky and perishable they cannot be transported very far. The price is based on how much sugar the beets contain when they're delivered to the factory. Farmers also get two more payments during the rest of the year based on sugar's net selling price.
Beets are a relatively expensive crop to grow, requiring migrant workers to weed the fields by hand.
But, historically, they have been profitable for farmers because the government's sugar policy has limited imports over the years and sugar is a high value product. However, lately farmers have been competing with cheaper imports. Sugar prices are the lowest they've been in nearly 20 years. Although the concept of farm cooperatives has been around for generations, there has been a renaissance in the last decade as farmers try to stay afloat by getting a bigger piece of the food production chain, according to Mark Drabenscott of the Center for the Study of Rural America at the Federal Reserve Bank's Kansas City branch. The new co-ops, which tend to focus on niche markets like buffalo and ethanol, resemble mutual funds because they only accept a limited number of investors, so their shares can be bought and sold and increase in value.