American Crystal and Union Agree to Labor Contract Extension

MOORHEAD, MINN. - June 20, 2001 - American Crystal Sugar Company and the Bakery, Confectionery, Tobacco Workers and Grain Millers Union (BCTGM) announced that the groups have agreed to a two-year labor contract extension. The contract covers approximately 1,500 employees at American Crystal's five Red River Valley sugarbeet factories and at distribution centers in Chaska, Minnesota and Mason City, Iowa. The distribution centers are operated by United Sugars Corporation, which is a marketing subsidiary jointly owned by American Crystal and three other sugar companies.

The contract extension provides wage increases of two percent effective August 1, 2002 and two percent on August 1, 2003. BCTGM members at the seven operating locations recently ratified the contract in local votes. Without the extension, the contract was set to expire July 31, 2002.

Both Union and Company officials emphasized the constructive attitude that lead to the contract extension. "In light of the current financial stress in the sugar industry along with discussions concerning international trade agreements and a new Farm Bill, this was an opportune time for both parties to extend the current contract rather than return to the negotiating table next spring," said American Crystal President and CEO James Horvath. "From our perspective, this is a positive underscore to the productive relationship that exists among the BCTGM, the Company and its shareholders."

BCTGM International Representative Dan Gust, said, "The contract provisions in terms of benefits and wage increases were important considerations in extending the agreement. The negotiating committee felt this extension continued to move the contract forward, benefiting the BCTGM members. It also provides a stable labor force and the necessary time element for American Crystal and the industry to appropriately address the domestic and international sugar issues that will define our future."

American Crystal Sugar Company is an agricultural cooperative owned by approximately 3,000 shareholders in the Red River Valley (Northwestern Minnesota and eastern North Dakota) involved in the growing and processing of sugarbeets. American Crystal is the largest beet sugar producer in the United States. American Crystal operates sugar factories at East Grand Forks, Crookston and Moorhead, Minnesota, and Drayton and Hillsboro, North Dakota. Its corporate headquarters and technical services center are located in Moorhead.