Latest news for Michigan Sugar Company shareholders and employees |
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Vol. XXVII, No. 4 - April 2022 |
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From the desk of Mark Flegenheimer |
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The longest campaign in the history of Michigan Sugar Company came to a close on April 24 when Sebewaing sliced the last beet from this massive crop. Thank you to everyone involved for your efforts in harvesting, receiving, and processing the 2021 crop. Our growers and ag staff did an incredible job delivering and piling over 5.5 million tons. The factory teams did exceptional work and processed beets for nearly 250 days while being short on staffing for nearly all of campaign. Everyone’s efforts are much appreciated. We are a cooperative and the essential part of being a cooperative is cooperation. This past campaign, with the numerous difficulties we faced, proves that when we work together, we can overcome any challenge. Thank you, thank you, thank you to everyone for your commitment and dedication this past year.
To update you on happenings in our industry, recap the last campaign, and update everyone on the 2022 crop, here goes ...
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We sliced a record-breaking 4.7 million tons this year, eclipsing our previous record by 150,000 tons which was set in 2015/16 … Unfortunately, with lower sugar content, sugar production was not a record. In total, production from beets will be close to 11 million cwt. and another 800,000 cwt will be produced from the desugarization facility. Pack on slice was 233 pounds. Bay City, Caro, and Sebewaing sliced beets for 249 days and Croswell ran for 214 days. Average slice was close to 19,500 tons/day. Overall, great job during some very challenging conditions. |
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In order to protect the interests of our shareholders, we made the difficult decision to declare force majeure and reduce our sales to all customers by approximately 1.8 million cwt. ... As the crop grew last summer, and with full acreage in the ground, we projected production could exceed 13 million cwt. from beets, plus desugarization, plus a large carryover amount. So we aggressively sold to ensure we had homes for all of this sugar. In the end, we did not produce the quantities we had projected and had to take appropriate action … It is important to note with the sugar we are not able to supply to our customers this summer (the 1.8 million cwt. from the force majeure) we will honor their contracts and ship these quantities to them in the fall of this year. |
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We have just over 147,000 acres contracted and approximately 10,000 acres planted ... There are a small number of shareholders, totaling 3,000 acres, who have not yet contracted ... These grower-shareholders must contract or rent out their shares or they will be charged $750/acre per our bylaws, grower agreement and board policies … There are growers in this group that have unique and challenging issues and need other shareholders’ help ... Our field consultants will work with all growers to try to help facilitate placement of these shares. In the spirit of cooperation, if you are planning on planting more than 90% of your acres (95% less another 5%), please let your field consultant know if you are willing to take some of these acres for this year. |
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With smaller crops in Michigan and Louisiana, and an increase in consumption, the USDA has announced two actions that will, in total, increase supply to the United States by nearly 400,000 tons … The reduced production in Michigan/Louisiana and the increase in consumption amounts to about 150,000 tons. So the 400,000-ton increase seems a bit excessive. |
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The board and management finalized our strategic plan for the next two years. We have five focus areas including: Shareholder Focus, Harvest Experience, Factory Labor, RWST, and Sustainability. A one-page recap of the plan will be posted to our website in the near future. |
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Standby Set Aside Program and Grower Agreement Amendment |
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Yesterday, the board approved a Standby Set Aside Program that outlines the rules if we ever need to implement a Set Aside in the future. The program assures that all growers get treated fairly and equally, and it also spells out details on when set-aside percentages would be announced, how growers can work together by transferring their obligations to leave acres unharvested, and penalties for non-compliance. This policy was adopted for the very rare occasion when we have too many beets. Last year, we did not have a formal program in place, and it created much confusion as we announced the requirement not to harvest some of the beets. Next year, with less than 150,000 acres being planted, there is little chance that beets will need to be left unharvested.
The board also approved an amendment to the Grower Agreement to implement a limited number of changes that are necessary to implement the new Standby Set Aside Program.
For full details visit the grower website, under Co-op Documents >> Harvest >> Standby Set Aside Guidelines (and Co-op Documents >> Forms >> Grower Agreement Amendment [04-29-2022]).
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The beets that came out of the hoop buildings showed a nice improvement in quality as compared to the ventilated beets … lime sales (a key metric of quality) dropped from around 2,000 to close to 1,300 ... Lime salts greatly reduce factory throughput and our ability to make good quality sugar. We saw increased slice rates when we switched to the hoop building beets which is another good indicator of improved quality. |
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With skyrocketing grain prices, Midwest Agri-Commodities (our co-product marketing company) is reporting significantly higher prices for beet pulp and molasses for next year … pulp prices will be well in excess of $200/ton versus $165/ton this year. |
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Sugar Association Newsletter |
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The Sugar Association is requesting our growers and employees subscribe to its newsletter. Hear from the scientific voice of our industry, receive links to educational resources, learn about the efforts made to enhance consumer understanding in the role sugar plays in a nutritious, balanced diet. We know you will find it interesting and time worthy. The newsletter is emailed every other month.
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The Board of Directors approved the purchase of 467 shares at yesterday's meeting, for a total of 4,071 shares transferred/sold this year. |
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Copyright © 2022. All Rights Reserved. |
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Michigan Sugar Company, 122 Uptown Dr., Ste. 300, Bay City, Michigan 48708
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