June 30, 2008
You may have seen news reports during the last week that United States Sugar Corporation, the largest cane sugar producer in the country, is selling all of its assets to the South Florida Water Management District for $1.75 billion. The reason for the sale is to that the Water Management District wants to convert land used for cane production into holding areas, to allow filtration of agricultural waste, giving increased flows of higher quality water into the Everglades. The proposed sale includes all assets, including the land, mill, refinery, and orange juice operations.
United States Sugar is American Crystal and Minn-Dak's partner in United Sugars Corporation, so this proposed sale is very important to us. Since USSC joined United Sugars in 1998, we have found the company and its management to be excellent business partners. They are good strategic thinkers, and they have been extremely supportive of the pool marketing concepts which govern United.
The bad news is that USSC is leaving United Sugars - the good news is that they will continue to produce sugar for seven more crops, spread over the next six years. Although the agreement signed by USSC and the state indicate that the sale will close by the end of calendar 2008, USSC will retain use of the cane land, cane mill, and sugar refinery for no less than six years. This means that nothing in our marketing arrangements will change any time soon. We are grateful for having an extended time to make appropriate decisions related to USSC's going out of business in the future.
I will try to answer any questions that I can about this transaction at the shop meetings during July. We look forward to seeing you then.
President / CEO