Minn-Dak Farmers Cooperative: Sweetening Life for Sugar Beet Farmers

The Minn-Dak Farmers Cooperative (MDFC) is a 40-years young organization located in Wahpeton, a city in the southeast corner of North Dakota. From its location in the heart of the Red River Valley, MDFC acts as a processing and distribution hub for sugar beet farmers located in eastern North Dakota and west-central Minnesota. While it may sound strange to call an organization formed in 1972 young, the sector of the domestic sweetener industry MDFC represents is still in its infancy and growing.

While sugar beets are the source of one-third of the world’s sugar, and they contribute more than half of the granulated sugar produced in the United States, the biennial’s position as a commercial crop has only come of age in the last century. Making sugar syrups from the plant has been documented since the 16th century, but the large-scale extraction of granulated sugar didn’t begin in Europe until the 19th century, with it taking root in the United States around 1900. The tuber continues to be grown in several countries with cooler, temperate regions, and it has been a crop in the Red River Valley since the late 1930s, though it took until the 1970s for the farmers of the region to obtain a proper processing facility and acreage allotment from the U.S. Department of Agriculture. Sugar beets are grown in 10 states in the USA.

“Our first crop was in 1974, and we’ve been raising sugar beets ever since,” reflects Tom Knudsen, vice president of agriculture, who started at MDFC right out of college in 1977. “There are roughly 500 shareholders currently, and we raise between 115,000 and 120,000 acres collectively.”

Growing Services to Suit

The challenges of cultivating sugar beets, as with many crops, are numerous, as the plant requires a specific type of soil, field preparation and climatic consistency to flourish. In addition, transportation to the processing plant needs to be reliable, as the sugar (sucrose) content of the plant (which averages 17 to 20 percent), can deteriorate once the sugar beet is harvested and experiences warmer temperatures. For the sugar beet producers of the Red River Valley, MDFC is a strategically located ally in getting the highest volume and quality for crops. Through MDFC shareholders are able to get their product into a growing variety of markets that can appreciate a quality domestic product.

“It is all natural, not chemically altered like high-fructose corn syrup,” says Knudsen. “We’ve been around a long time, but we’re always looking for ways to improve for our growers.”

MDFC is a closed cooperative, owned by the growers, who must be a member to raise the crop within the organization’s territory. And raise it they do, to the tune of 3 million tons in 2012. MDFC’s 300 year-round employees, led by a 13-person executive management staff and a nine-person board of directors, aid this industrious effort, and that number of employees can swell to over 500 during prime processing season. The sugar beets are planted in April/May, and then harvested from August to October; the exact date when the crops hit their optimal yield is impacted yearly by varying moisture levels and other growing conditions.

Taking this into account, MDFC’s staff of agronomists works with growers to audit land and craft a customized program to nourish and optimize soil in an effort to stabilize planning dates. This can increasingly involve the integration of precision agriculture, which takes advantage of everything from GPS-guided machinery to smartphone records keeping to allow the most production on a fixed amount of land. Ultimately, however, it all boils down to planting the crop and hoping the weather is kind.

“It’s tough to start sugar beets, but once that’s happened they’re one of the toughest crops, rooting down eight feet in search of water if they need to, so they’re somewhat drought resistant,” explains Knudsen. “For those who have never seen a sugar beet, they look like a turnip, but they can be finicky. Luckily, we know how to help them grow.

“And you can’t just store them anywhere; you need to have nice, rotten, cold weather,” Knudsen continues, laughing. “We don’t just rely on Mother Nature, though. We have enhanced storage with active use of Mother Nature provided refrigeration and freezing. so we could process beets well into May, planting the next crop while we’re finishing the old one.”

Once the growers haul in the harvest, MDFC goes to work processing, then sends its commodities by truck and rail to be distributed worldwide.

Sweetening the Pot

The vast majority of MDFC’s output – marketed through United Sugars Corporation and Midwest Agri-Commodities, strategic national partners with a larger profile in the industry – goes to industrial users, many of them bakeries and food-processing companies. Also, General Mills, Hershey’s, M&M Mars, Kellogg and more are counted among MDFC customers. In addition, revenue is generated through the sale of sugar beet pulp co-products used in nutritious animal feed. There is also a growing market for molasses, for uses such as bakers yeast feedstock and in vitamins, among many niches. However, it is also being seen as a potential avenue to reclaim sugar.

Molasses can be sold for up to $140 a ton, while sugar can approach goes for $600 to $700 a ton. With molasses being half sugar, it makes sense to take all steps necessary to get the maximum return from the product. With this in mind, MDFC has recently approved the purchase and installation of a $70 million system to process molasses and extract that sugar. It’s a relatively more complex procedure, but it will ultimately add to the bottom line, as will such efforts as analyzing sugar beets for biofuel use.

“We’re somewhat fixed on what we can process; there’s only so many tons in so many days,” explains Knudsen. “An expansion could be done, but there is a market quota that restricts what we can raise and grow, so we focus on the efficiencies, minimizing loss, just like everyone. Dividends here get plowed back directly into the factory and into the farms.

“Sugar beets do not get a subsidy; we don’t take one dime from taxpayers or out of the Treasury,” Knudsen continues. “So while we can’t control politics or the weather we closely watch everything else that would impact costs and we try to increase efficiency.”

While not currently considering any other major infrastructure reinforcement beyond the molasses-processing system, MDFC is always looking to see what new means it can help farmers implement to assist with droughts, weeds and pests. Knudsen recognizes that the majority of funding for disease- and weed-control product research, etc., is directed toward corn and soybean crops, but MDFC continues to communicate with chemical companies to promote sugar beet-specific developments.

“Nationwide, there’s only 1.4 million acres of sugar beets, so agribusiness companies don’t want to spend millions on products for us, but we look at science, biotechnology, whatever we can identify to help our members succeed,” says Knudsen Another way MDFC assists its members is through information it distributes in the “Current Headlines” segment of its website, www.mdf.coop.

Actively promoting the sugar beet industry, Minn-Dak Farmers Cooperative is aging gracefully while keeping its members renewed.