American Crystal and Union Negotiate Seven Year Labor Contract

MOORHEAD, MINN. - September 2, 2004 - American Crystal Sugar Company and the Bakery, Confectionery, Tobacco Workers and Grain Millers International (BCTGM) announced today that the groups have negotiated a seven year labor contract. The contract covers approximately 1,650 employees at American Crystal's five Red River Valley Sugarbeet factories as well as distribution centers in Chaska, Minnesota and Mason City, Iowa. BCTGM members at the seven locations approved the contract late yesterday.

The contract provides wage increases of two percent per year from August 1, 2004 through July 31, 2011. The contract also provides increased Company contributions to employee pension funds each year. A representative of the U.S. Federal Mediation and Conciliation Service assisted both parties in reaching the settlement last week.

Both Union and Company officials said that the contract represents the results of hard bargaining on both sides, going back to the start of negotiations in May of this year. BCTGM International Representative Dan Gust, who represented the Union in negotiations, said that the talks were sometimes contentious, but always constructive. "Our members identified for us some key priorities before the negotiations started. We worked to make sure these were front and center with the Company, and we think we were able to get a good compromise in the end."

American Crystal President and CEO James Horvath said that the Company recognizes the critical contribution that union employees make. "Every single day of the year, our union employees do thousands of things to make American Crystal successful. We recognize their contributions, and we believe this contract sets a good tone for the next seven years." Horvath also made note of the strong partnership between the Company's employees and its grower-owners on critical political affairs. "American Crystal is facing some serious challenges in terms of trade agreements that could possibly open our borders to subsidized foreign sugar. We have an incredibly strong working relationship with members of the BCTGM. They are great advocates for reasonable sugar policies in Washington, DC, and a key ally on that front."

American Crystal Sugar Company is an agricultural cooperative owned by approximately 3,000 members in the Red River Valley of northwestern Minnesota and eastern North Dakota. It is the largest sugarbeet processor in the United States. American Crystal operates sugar factories at East Grand Forks, Crookston and Moorhead, Minnesota, Drayton and Hillsboro, North Dakota, and Sidney, Montana. Its corporate headquarters and technical service center are located in Moorhead.