The acquisition of the American Crystal Sugar Company business and assets was organized in 1973 by sugarbeet growers in the Minnesota and North Dakota areas of the Red River Valley – and it’s now owned by nearly 2,800 growers.
Five sugarbeet processing facilities in the Red River Valley provide sugarbeet processing for sugar and agri-products:
American Crystal Sugar Company Factories
The company owns all of its factories and the land on which they are located.
Each of the processing factories includes the physical facilities and equipment necessary to store and process sugarbeets into sugar.
American Crystal Sugar Company owns molasses desugarization (MDS) plants at its East Grand Forks and Hillsboro facilities. The MDS plants process molasses to extract additional sugar.
American Crystal Sugar Company has sugar packaging facilities located at the Moorhead, Hillsboro, Crookston, East Grand Forks, and Sidney factories.
Beyond the Red River Valley
American Crystal Sugar Company, through its wholly-owned subsidiary Sidney Sugars Incorporated, owns and operates a sugarbeet processing facility in Sidney, Montana, which processes non-member sugarbeets from approximately 30,000 acres.
United Sugars Corporation
We market our sugar through United Sugars Corporation, a cooperative common marketing agent owned by American Crystal Sugar Company, Minn-Dak Farmers Cooperative, and United States Sugar Corporation.
Our agri-products are marketed by Midwest Agri-Commodities Company. Midwest is a cooperative common marketing agent owned by American Crystal Sugar Company, Minn-Dak Farmers Cooperative, Southern Minnesota Beet Sugar Cooperative, and Michigan Sugar Company.
American Crystal Sugar Company is engaged primarily in the production of sugar from sugarbeets. Total sugar sales account for approximately 90 percent of the company's consolidated total revenues.
United Sugars Corporation, the company's sugar marketing agent, sells sugar primarily to industrial users such as confectioners, breakfast cereal manufacturers, and bakeries, which make up approximately 90 percent (by weight) of the sugar sold.
The remaining portion is marketed by United Sugars to wholesalers and retailers under the "Crystal Sugar" trademark and various private labels for household consumption. With regard to brand name sales, the company licenses the use of the "Crystal Sugar" trademark to United.
American Crystal Sugar Company also produces agri-products such as molasses; sugarbeet pulp; betaine and concentrated separated byproduct (CSB); byproducts of the molasses desugarization process; and sugarbeet seed. The company's agri-products are marketed through Midwest Agri-Commodities.
Our total annual sugar and agri-product production is influenced by the amount and the quality of sugarbeets grown by its members and non-members, the processing capacity of the company's plants, its ability to store harvested sugarbeets, and by government programs and regulations.
Sugarbeet pulp is marketed to livestock feed mixers and livestock feeders in the United States and foreign markets.
Sugarbeet molasses is marketed primarily to yeast manufacturers, livestock feed mixers, and livestock feeders. Total agri-product sales account for approximately 10 percent of American Crystal Sugar Company consolidated total revenues.
Crystal Beet Seed
American Crystal Sugar Company operates a sugarbeet seed division, which produces and processes sugarbeet seed for sale to the company's members.
American Crystal Sugar Company purchases all of its Red River Valley sugarbeets from members under contract with the company.
All members are party to a five-year contract with the company that automatically renews for an additional five-year term unless terminated by one of the parties at the end of the then-current term. In addition, each member has an annual contract with American Crystal Sugar Company specifying the number of acres the member is obligated to grow during that year. Members are required to have a five-year contract and an annual contract with the company and to own shares of Preferred Stock in proportion to the number of acres of sugarbeets they wish to deliver to American Crystal Sugar Company.
The company's board of directors has the discretion to adjust the acreage that is required to be planted for each share of Preferred Stock held by the members by setting the "planting tolerance." The board of directors and management regularly review and determine the relationship between the ownership of Preferred Stock and acreage planting.
The period during which American Crystal Sugar Company plants are in operation to process sugarbeets into sugar and agri-products is referred to as the "campaign."
During the campaign, the company's factories operate 24 hours per day, seven days per week. In the Red River Valley, the campaign typically begins in September and continues until the available supply of sugarbeets has been depleted, which generally occurs in May of the following year.
Based on current processing capacity, an average campaign lasts approximately 260 days, assuming normal crop yields. At the Sidney, Montana, factory, the campaign begins in late September or early October and generally concludes in February.
While the timing of the company's processing activities are connected to the start of the harvest and the available supply of sugarbeets, the sales of sugar and agri-products occur ratably throughout the year.
Market and Competition
The United States refined sugar market has grown at about 1-2 percent per year over the last 10 years. Corn sweeteners and non-nutritive sweeteners also constitute a large portion of the overall sweetener market. American Crystal Sugar Company believes that the United States annual market growth for sugar in the near future will be approximately 1.0 percent.
Approximately 65 percent of the United States refined sugar market share is concentrated in the top three sellers. The company's sugar production and sales represent approximately 13 percent of the total domestic market for refined sugar. Sugar sales by United Sugars Corporation, the company's marketing agent, represent approximately 25 percent of the United States refined sugar market.
United is currently the second-largest marketer of refined sugar in the United States. Main competitors in the domestic market are: Domino Foods Incorporated; Cargill, Incorporated; The Amalgamated Sugar Company LLC; Louis Dreyfus Commodities LLC: Michigan Sugar Company; and The Western Sugar Cooperative.
Substantially all of the hourly employees at the company's factories, including full-time and seasonal employees, are represented by the Bakery, Confectionery, Tobacco Workers and Grain Millers (BCTGM) AFL-CIO. Office, clerical, and management employees are not unionized, except for certain office employees at the Moorhead and Crookston, Minnesota, and Hillsboro, North Dakota, factories who are covered by the collective bargaining agreement with the BCTGM.
American Crystal Sugar Company generally employs approximately 1,400 full-time employees, of which approximately 1,100 are hourly and 300 are salaried. In addition, the company generally employs approximately 900 hourly seasonal workers, approximately 400 during the sugarbeet harvest and approximately 500 during the remainder of the sugarbeet processing campaign. During the sugarbeet harvest, the company also contracts with third-party agencies for approximately another 1,300 additional workers.