This Christmas, beet growers learned that the domestic refined price had dropped to the lowest levels since the late 70's and mid 80's. The potential large U.S. production coupled with static consumption was the major cause, but the uncertainties about Mexico's access to the U.S. market, leaks in our border protection, and other governmental actions played a role in the price drop. Several weeks ago, I was contacted by a sugar economist who does production estimates. He found in his nationwide survey that growers were not backing off on their planting intentions for beets or cane, even with the low prices. Either I'll drop my costs to the bare bones and hope to get by this year, or with the new varieties, improved agronomic techniques, and other potential for improved yields, I'll put my beets on the better soils and try to offset the price decline with higher production.
Growers are the eternal optimists.
If their bankers will stay with them, growers can try to hold their operations together, but frankly, the growers and industry will suffer. Growers will be living off their equity, hoping for price improvements down the road. The sugar industry has about three and a half years on the current sugar policy. There is discussion that Congress will revisit the farm legislation this session. To me, it seems a given, with agriculture's financial problems.