Sugar beet lawsuit could loom large for Red River Valley
A federal judge in San Francisco could decide Friday to order a halt to the planting of any genetically modified -- or "Roundup Ready" -- sugar beets in the nation.
That would be a big deal in the Red River Valley, the biggest sugar beet growing region in the nation, because most growers have switched to Roundup Ready seed varieties the past two years.
Leaders and growers of the two grower-owned sugar beet processing companies in the valley, American Crystal Sugar in Moorhead and Minn-Dak Farmers Cooperative in Wahpeton, N.D., are watching closely to see what the judge does.
American Crystal will have attorneys in the courtroom Friday, said David Berg, president and CEO of the $1.2 billion firm with processing plants in East Grand Forks, Crookston, Drayton and Hillsboro, N.D., as well as Moorhead.
Because it not only grows and processes beets into sugar, but also markets its own variety of beet seed, American Crystal is one of several entities in the industry given a sort of secondary standing in the case.
The judge's decision could affect many in the Valley. Besides the growers and other share owners, thousands of people work in the plants and drive beet-hauling trucks.
"There has been a tremendous amount of legal time and fees spent on this because it's important," Berg said.
The judge could make a decision Friday, or could take the issue under advisement.
The prospect of having to switch growers' seed choices at this late date to conventional varieties "is a very unappealing plan," Berg said Monday.
Supplies of such non-GMO beet seed are old and need to be collected and processed to be viable for planting, he said.
"We would not be able to plant a full crop and what went into the ground would be far less competitive than better-quality seed."
This has been a contested issue for some time, so there is no real surprise here for American Crystal, except whatever the judge decides Friday, Berg said.
"The most salient point here is that the plaintiffs are acting as if there is an emergency right now. But in truth, Roundup Ready sugar beet seed has been grown for seven years and Roundup Ready sugar beets have been grown across the country for three years. So why is there an emergency to try and stop the planting of the crop in 2010?"
Friday's hearing stems from a judge's ruling in September that the U.S. Department of Agriculture's 2005 approval of the sugar beet varieties developed with a genetic immunity to Monsanto's popular Roundup herbicide was premature.
The judge ordered USDA to do more environmental impact studies.
Meanwhile, organic farmers in Oregon, where the nation's sugar beet seed mostly is grown, joined with environmental groups to seek a federal injunction to stop any use or planting of Roundup Ready beets until the USDA review, which could take three years.
American Crystal growers first planted Roundup Ready beets in small amounts in 2008.
Last year, 82 percent of American Crystal's beet acres were planted with Roundup Ready varieties, said Dan Bernhardson, agriculture director for the co-op. "This year, we expect that number to rise."
Weed control always has been one of the toughest problems for sugar beet growers, which is why for decades growers here hired thousands of migrant farm workers, mostly Mexican-Americans from Texas, to thin and weed the beet rows with hoes.
Improvements in equipment, technology and seed varieties have cut the amount of hand labor needed to raise sugar beets.
Roundup Ready varieties allows a simpler, less-risky program of herbicide spraying to control weeds chemically without hurting the beets themselves, Bernhardson said.
It also requires a grower to pay about $78 per acre at a "tech fee," to Monsanto to use the varieties, in addition to the cost of the seed itself, he said.
It's up to each grower whether to use Roundup Ready seed or not, but most have opted to do it, obviously.
American Crystal also produces and markets its own brand of Roundup Ready seed, and some growers buy it, he said.
Roundup Ready seed varieties have become common in other crops, especially soybeans.
But the whole idea of "genetic modification" of farm crops remains controversial in many quarters, especially in Europe, because of concerns about food safety and that can affect farm sales.
"The sugar beets were unlawfully deregulated," said Paul Achitoff, an attorney for Earthjustice, the environmental public interest law firm representing plaintiffs, The Associated Press reported. "The court has already found that. Legally, they shouldn't be on the market."
A similar case in 2007 challenging Roundup Ready alfalfa is being appealed by Monsanto to the U.S. Supreme Court. But few alfalfa growers had switched to Roundup Ready varieties, so the case has less direct impact.
Because of the stakes and controversy over the legal challenges, beet growers have kept a low profile on the issue.
Neil Widner, a Stephen, Minn., grower elected in December as chairman of American Crystal's board of directors, Monday was in Washington, D.C., on the annual winter lobbying trip by board directors.
He told the Herald because of the litigation his best course of action was to not comment on the lawsuit itself or even on how big a deal the use of Roundup Ready beets is for the growers.
Luther Markwart, spokesman for the American Sugar Beet Growers Association in Washington, told The AP the injunction motion was "radical."
"It would have disastrous impacts on the 10,000 growers, our processors, the seed companies and the economies of 10 states," Markwart said.
American Crystal's 850 owner/growers don't need any added stress right now.
Last year's late-starting and difficult growing season led to one of the lowest projected payments for the crop in years, of $40 per ton, mostly because of low sugar content.
That means a grower's average income from sugar beets will fall 28 percent from an average the previous three years of $1,232 per acre to $880 for the 2009 crop, based on American Crystal's numbers.
The average yield of 22 tons per acre last fall is near the average of the past five or six years, but lower than the record yields around 25 tons the previous two years.
A $40 per-ton payment expected for the 2009 crop is 19.4 percent lower than the average payment the past three years of $49.64 per ton, according to American Crystal.
American Crystal's 850 growers control shares to plant about 500,000 acres of beets. (Shareholders total about 3,000.)
The co-op's plans for the 2010 season is to allow growers to plant 80 percent to 85 percent of their stock shares, which would amount to 400,000 to 425,000 acres, Berhardson said. It's part of the recent increased yields that have maxed out the processing capacity of the five factories.
A year ago, the same plans were in place, until the floody, late spring made production outlooks less rosy, so growers ended up being allowed to plant about 92 percent of their share acreage.
The co-op aims to produce just over 10 million tons of sugar to keep the five processing plants operating at optimum levels from harvest in October until late May.