| High sugar prices mean sweet profits for producers |
 |
 |
 |
| Local Content - Local Agriculture |
| Written by Ric Swihart |
| Thursday, 18 February 2010 18:18 |
|
While consumers may end up paying the price as world sugar prices hover at 30-year highs, not everyone is complaining. Some in southern Alberta, home to Canada's main sugar beet growing and refining industry, welcome the booming world sugar prices which mean potentially-greater profits for Lantic Sugar and higher returns for growers plagued by weather-related difficulties. Alberta Sugar Beet Growers marketing board directors and Lantic Sugar signed a new three-year master agreement before the 2009 crop was planted. It includes a clause that could trigger a premium sugar beet price for growers depending on world prices and sales. Board president Rob Boras, of Picture Butte, said it is too early to say how much benefit southern Alberta beet growers will receive since all the sugar from the weather-ravaged 2009 crop has yet to go to market. One factor will be the percentage of the beet sugar which is sold on the domestic level. Under a federal ruling, all sugar exported from Canada must be processed from sugar beets. Andrew Llewelyn-Jones of Taber, agricultural superintendent for Lantic, said he is convinced the new three-year contract signed with the marketing board will produce improved returns for growers. The key is to find a way to ensure that sugar beet growers can continue to grow beets and Lantic Sugar can continue to process them into sugar and to market that sugar, he said. Perhaps the disappointing production season is a hotter topic. Growers harvested about 35 per cent of the 2009 crop in excellent condition. Then Oct. 4, the weather turned nasty with rain, snow and freezing temperatures, resulting in stalled harvest operations, and eventually a halt was called to harvest. That left about 6,500 acres of the 29,400 acres to be harvested still in the ground and in need of cleaning up before the 2010 field operations. “I am cautiously optimistic that producers will be paid more per tonne," said Boras. "There is some general optimism that the higher world sugar prices will hold and some benefits will be realized with the new contract." Some Montreal bakers indicate a tripling of the sugar prices in the past year and a hike in bakery goods prices last year will likely be followed by a 20-per-cent hike this year. Andy Koster of Picture Butte, owner of Koster's Bakery, recently purchased 7,000 pounds of granular sugar to brace for expected higher retail prices. Edward Makin of Lantic urges calm, claiming most customers will avoid raising their prices unless sugar prices remain in the range of 28 cents a pound U.S. for months to come. A year ago, that wholesale price was about 11 cents a pound. Canada consumes 1.2 million tonnes of sugar a year. About 85 per cent is used by institutions, processors and commercial customers. Koster said he worries more these days about the high price of flour and shortening, often ingredients used in higher volumes than sugar. "And if the price of sugar increases markedly, it could be that flour and shortening prices will dip, allowing me to hold the price of my bakery items," he said. |