CoBank is forecasting a better year for U.S. sugarbeet growers and processors.
“Assuming we return to reasonably normal harvest weather this fall, expectations are for a much bigger crop to be harvested for the 2020-21 season,” says Tanner Ehmke, manager of CoBank’s Knowledge Exchange. “With processors contracting refined sugar at much higher prices, fortunes are expected to turn favorable for growers and processors in the marketing year ahead.”
U.S. sugarbeet production last year marked the fifth-biggest year-over-year decline on record, dropping 14% to 28.6 million short tons.
In three major sugarbeet producing states — Minnesota, North Dakota and Nebraska — production fell more than 20%. Approximately 13.5% of planted acres were not harvested due to wet weather. Yields dropped to the lowest level in five years due to late planting and poor harvesting conditions.
USDA is currently predicting the 2020-21 sugarbeet crop harvest to increase 18% year over year, landing at 33.7 million short tons, assuming a return to normal harvest weather this fall.
USDA’s Prospective Plantings report forecast U.S. sugarbeet acreage at 1,138,500 acres for 2020, an increase of 6,500 acres compared to 2019.
Demand for sugar has remained strong, and refined sugar supplies have tightened. The price of wholesale refined beet sugar has risen to 44 cents per pound, up from 35 cents per pound last fall. The price is the highest since 2012. However, raw sugar prices have held steady at around 25 to 27 cents per pound for over the past two years.
COVID-19 has had minimal impact on total demand for sugar in the U.S., according to the CoBank report. While total sales to sugar buyers in the food service sector has suffered due to the loss of customers, retail sales to consumers during the pandemic has increased.
“With processors contracting an expected large crop in today’s strong price environment, cooperatives are expected to be in a much-improved financial position, enabling them to reinvest proceeds to make plant upgrades and disburse more back to coop members,” Ehmke says.
Read the full report online: “Sugar Outlook: Sweeter Times Ahead for Sugarbeet Growers and Processors.”
Source: CoBank, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.