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THE
SUGAR BEET INDUSTRY
in the

Twelfth Federal Reserve District

Supplement to

MONTHLY REVIEW




APRIL, 1951

FEDERAL RESERVE BANK
OF
S A N FRANCISCO

• • CONTENTS

• •
Page

IN T R O D U C T IO N .........................................................1
THE GOVERNMENT A N D THE SUGAR INDUSTRY

. . . .

2

G R O W IN G A N D PROCESSING SUGAR B EET S................... 3
PRODUCTION T R E N D S ............................................... 8
BEET S U G A R ............................................................. 10
PRICES AND R E T U R N S ............................ ....

12

FUTURE OF THE IN D U S T R Y .......................................... 16




Prepared by H. Fisk Phelps, Agricultural Economist,
under the direction and review of officers
of the Research Department.

INTRODUCTION
o t a n ic a lly ,

ports of cane sugar from the West Indies, and Napoleon
began an intensive campaign to stimulate beet sugar pro­
duction. Though this particular project came to an early
end, the beet sugar industry continued to grow through­
out most of Europe, largely under the impetus of gov­
ernment assistance.

the sugar beet is known as Beta Vul­

Bgaris, the “ common beet/’ Its use, however, belies
its name. For from the sugar beet we get one of the most
important elements of our diet, one of the cheapest and
most concentrated of all energy foods. Sugar is so much
a part of our daily life that most of us are not conscious
of its real significance until we are restricted in its use
or deprived of it.
The sugar beet is a paradoxical plant. It is a vegetable
whose principal product, sugar, contains no vegetable
matter. As a result, almost the entire vegetable part of
the beet— the root itself and the leaves— is available for
commercial uses. The vegetable portion is ultimately re­
turned to the soil, either directly or through animals as
fertilizer.

Beet sugar's start in the
United States

Beginning in the 1830’s, various attempts were made
in the eastern part of the United States to grow and
process sugar beets, but the ventures met with little suc­
cess. About a decade later, the newly established Mor­
mon Church began a series of projects to produce sugar
from beets. Machinery was imported from France and
shipped to Utah by covered wagon. This was the first
attempt to manufacture beet sugar in Western America,
but the enterprise could produce only syrup and had to
be dropped. Succeeding attempts were made in Utah,
California, and parts of the Middle West and the East,
but these too proved unsuccessful. It was not until 1879
that a factory at Alvarado, California was first operated
on a successful basis. Nine years later, Claus Spreckels
built the second successfully-operated beet sugar factory
at Watsonville, California. Thereafter, the development
of the industry— with the encouragement of the Sugar
Bounty Act of 1890 and the Dingley Tariff of 1897— was
fairly rapid.

A particularly apt description of sugar is ‘crystallized
air, water, and sunshine.” For plants take carbon dioxide
from the air and water from the soil, and, using energy
from the sun, combine these materials by the process of
photosynthesis into sugar. The sugar, in effect, stores the
sun’s energy until it is broken down into its original com­
ponents, carbon dioxide and water. At such a time— for
example, when a man takes physical exercise— the energy
which went into the making of the sugar is released to
his body.
Some of the sugar manufactured in the leaves of the
plant is used in plant growth; part is converted into pro­
teins, starches, oils, and other food elements. The re­
mainder is stored in various parts of the plant. Two
plants— the sugar beet and the sugar cane— store sugar
more abundantly than any others, but pure sugar can also
be extracted from palm trees, maple trees, sorghums, and
many of our common fruits.

Early refining difficulties

The greatest difficulties which had to be overcome in
these early years wTere not related to the production of
the beet. Reasonably successful culture was achieved
fairly early. But there was a notable lack of technical in­
formation about the methods of extracting sugar from
beets. Machinery was not available. There were not suffi­
cient experienced men in the country to run the new fac­
tories. The extent of the difficulties encountered is illus­
trated by the fact that in 1880, 14 of the 15 factories
which had been erected were failures— only the one at
Alvarado was operating. As the pioneers learned through
bitter experience and as more information was obtained
from the continent, however, success became the rule.
The century closed with thirty completely equipped fac­
tories successfully extracting sugar.

To the chemist, there are hundreds of different sugars,
but only a few of these have the attributes of sweetness.
The sugar of commerce— the sugar with which we are
most familiar— is known, chemically, as sucrose. Most of
us are also familiar with some of the other sugars—
maltose (malt sugar), lactose (milk sugar), and dex­
trose (corn sugar). Of these, sucrose apparently has the
ideal sweetness for most tastes. In addition, it is abun­
dant, readily available from the sugar cane and sugar
beet, easily produced and packaged, and keeps almost
indefinitely.
As with many agricultural crops, the origin of the sugar
beet is clouded in the pages of history. It is said to have
descended from the wild beet which was found growing
in countries bordering on the Mediterranean Sea. Wher­
ever the beet originated, it was not until the middle of
the eighteenth century that a German chemist proved
that the beet root stored a sugar identical with cane
sugar. By that time, cane sugar had become firmly es­
tablished in all the tropical areas of the world, including
those in the New World.

Since the first beet sugar factory was started in this
country over one hundred years ago, a total of 168 have
been built in 26 states. Of this number 83 are in exist­
ence at the present time in 16 states throughout the
Middle West, the Intermountain states, and on the Pa­
cific Coast. The three states, Colorado, Michigan, and
California have one-half of the total number. Since the
factories must be located close to the areas of production,
present acreages are located in the areas mentioned
above. For several years California has been the largest
producer of beets, followed by Colorado, Idaho, Michi­
gan, Montana, Nebraska, and Utah.

Napoleon provided the impetus for the beginnings of
the beet sugar industry. The Napoleonic Wars cut off im­




1

THE GOVERNMENT AND THE SUGAR INDUSTRY
Since the introduction of domestic sugar beet growing
the United States Government has played a larger and
larger part in the industry. In fact, even before sugar
beets were grown extensively, the importation of sugar
was under considerable Government control. Probably
no other agricultural commodity is subject to more Gov­
ernment control, assistance, and regulation at the pres­
ent time.
The history of Government intervention in both the
growing and processing phases of the industry discloses
countless explanations for the necessity for such control
and assistance. Originally, sugar policy was based on the
need for Federal revenue; protection of a young grow­
ing industry was used next, followed by “ preserving the
American market for American farmers,” national se­
curity, low sugar prices, protection from low-cost pro­
ducing areas, surplus supplies, and equality of income
for domestic and insular sugar beet and cane producers.
The source, production, and distribution of sugar is con­
trolled by import duties, excise taxes, import compen­
sating taxes, allotments, quotas, and conditional pay­
ments.

the Sugar Acts, tariff rates were gradually lowered, be­
ginning in 1934. At present the rate is one-half cent per
pound for Cuban raw sugar and .69 cents for raw sugar
from other countries. The present raw Cuban sugar price
is 5% cents per pound.
International agreements

The need for some form of international agreement
was recognized by most exporting countries early in the
history of world sugar trade. Such agreements have been
the result and not the cause of governmental interven­
tion in the sugar industry. The many occasions when
world surpluses appeared were not due to uneconomic
policies in the major exporting countries, but to the sup­
port of high-cost production fostered by national protec­
tionist policies and imperial preference in various guises.
As a result, international sugar agreements have been
necessary to fortify the most efficient producing areas
against the excesses of nationalistic policies which ef­
fectively kept low-cost sugar out of many world markets.
As early as 1902, the major countries of Europe en­
tered into an agreement to eliminate bounties on the pro­
duction and exportation of sugar. This agreement, which
remained in effect until the start of W orld War I, did
much to bolster world sugar prices. The surplus situa­
tion which developed in the 1920’s resulted in another
attempt at international solution to the problem. In 1931,
the major exporting areas agreed to limit their exports
to allocated quotas. Production in these countries was
subsequently reduced, but the agreement failed to im­
prove the price situation because production increased
in the non-participating countries.
The International Sugar Agreement of 1937 corrected
many of the failings of previous agreements. The coun­
tries included in the agreement comprised the major im­
porting as well as the major exporting countries— ac­
counting for 85 to 90 percent of total world production
and consumption of sugar. Exporting countries were al­
lotted specific quotas on the world market, and the im­
porting countries agreed to provide assured markets.
Without a doubt, this plan involved one of the most farreaching surrenders of national sovereignty to interna­
tional control that had yet been attempted along economic
lines. Its effectiveness was never fully tested, however,
since the start of W orld War II made the Agreement
largely inoperative. This Agreement is still nominally
in effect, though the member countries are currently
working on a new one.

Tariff: revenue and protection

Since sugar was originally known to the western world
as a luxury product, it was admirably suited to a rev­
enue tariff. During the 1890’s, however, as beet sugar
gained a foothold in this country, the tariff became
openly protective to both the beet growing and the sugar
refining industries. Shortly thereafter, preferential treat­
ment was given to Cuba, and raw sugar from Hawaii,
Puerto Rico, and the Philippines was admitted duty-free.
As a result of these preferential treatments, imports from
the rest of the sugar-producing world were practically
excluded.
Under this protection, domestic, insular, and Cuban
production increased at a rapid rate. Similar protection­
ist policies in other parts of the world fostered sugar pro­
duction in Europe and in the major cane growing areas,
and world output increased sharply. After the shortages
caused by W orld W ar I, production again continued its
upward trend, owing in part to technological advances.
By the early thirties, the world industry wTas in a state
of chronic surplus. Domestic producers, despite an in­
crease in the tariff rate, suffered severely, and it became
apparent that tariff protection alone was inadequate from
the industry point of view.
In the early stages of the development of the industry,
the tariff had proved effective in preventing the entry of
low-cost sugar. But as world surpluses grew and prices
dropped, foreign sugar could come in over the tariff and
still be competitive with domestic and insular supplies.
By 1932 the New York price for raw Cuban sugar1 had
declined to less than a cent a pound, compared with im­
port duties of two cents on Cuban sugar and 2 Vi cents
on all other sugar. With other aid and protection under

United States Sugar Acts

In spite of the increased U. S. tariff and the interna­
tional agreement which were in effect during the early
1930’s, world sugar markets were in the throes of an
unprecedented depression at that time. Unrestricted pro­
duction in and marketing from the areas supplying the
United States market (except Cuba) had resulted in price-

1 Cost plus freight delivered at N ew York, less duty.




2

crop control regulations, there is no referendum among
growers before quotas or allotments are imposed. All reg­
ulations must be observed by any persons involved in pro­
duction, processing, or marketing of sugar, and violators
are fined three times the market value of any excess
marketed.
Payments to growers: Regulation of the sugar market
through the quota system is supplemented by a system of
conditional or benefit payments by the Government to
continental and insular producers. These payments are
conditional upon the producers' meeting several require­
ments : employing no child labor; paying farm laborers in
full and at wage rates not less than those determined by
the Secretary of Agriculture; and, finally, observance of
the specific allotments if they have been assigned. The
rate of payment is based on the amount of raw sugar com­
mercially recoverable from the production of the farm.
Growers whose crop produces less than 350 short tons
of raw sugar receive 80 cents a 100 pounds; larger grow­
ers receive payments on a descending scale, reaching a
minimum of 30 cents a 100 pounds on any production in
excess of 30,000 short tons. Payments may also be made
to growers whose yield is deficient or who must abandon
acreage because of adverse weather, disease, or insects.
Excise taxes: In order to provide funds for these sub­
sidy payments, the Government imposes either an excise
or an import-compensating tax on sugar. The excise tax
is levied on all sugar refined in the United States, whether
from imported or domestic raw sugar. This tax, which
amounts to 53^2 cents a hundred pounds, must be paid
by the refiner at the time the sugar is released for con­
sumption. The small quantities of refined sugar which
are imported into the United States are subject to an im­
port-compensating tax of the same amount. This tax is
paid in the same manner as a duty.
In effect, the conditional payments to growers compen­
sate for the lower price which the grower receives from
the processor as a result of the excise tax placed on the
refined sugar sold by the processor. For the vast majority
of the smaller producers, the payments are in excess of
the tax. But the lowering of the scale of payments for the
larger producers means that some of the largest receive
payment smaller than the tax. Since producers in foreign
countries and Cuba receive no payments, the tax has the
same effect as a duty in reducing the net amount received
for sugar sold by them in the United States market.

depressing surpluses and record low prices in the sugar
market, with consequent shrinkage in the income of do­
mestic and insular producers. The Cuban industry was
suffering one of the wrorst economic depressions in its
history. The tariff had provided effective protection to
domestic producers in former years when the rate of
duty was moderate, when the world price was satisfac­
tory, and when Cuba was the principal external source
of supply for the American sugar market. It lost much
of its effectiveness for domestic producers when world
prices collapsed.
Beginning with the Jones-Costigan Sugar Act in 1934
(and continuing with the Sugar Acts of 1937 and 1948)
the United States substituted quotas in preference to the
tariff as the effective instrument of national policy with
respect to sugar. Though these Acts call for considerable
Government control and restriction of the sugar industry
and give the Secretary of Agriculture wide powers, their
use was felt necessary in order to maintain and protect
the welfare of the domestic industry.
The present Act, the Sugar Act of 1948, is essentially
the same as the two previous Acts. It consists of three
basic features— the quota, the conditional payment to
growers, and the excise tax.
The quota: Under the quota system, the Secretary of
Agriculture determines at the end of each year the amount
of sugar needed by consumers in the United States dur­
ing the next year. The determination must attain that
delicate balance where prices are sufficient to protect the
domestic industry and yet are not excessive to consum­
ers. The various sources of supply— namely, the main­
land beet areas, the mainland cane areas, Puerto Rico,
Hawaii, the Virgin Islands, the Philippines, Cuba, and
full-duty countries— are each allotted a specific share of
the total amount determined as required. The first five
areas are allotted a total of about 4*4 million tons on
the basis of fixed tonnage allotments; the Philippines
may supply nearly a million tons; and of the remainder,
Cuba is assigned 98.6 percent and other foreign countries
1.4 percent. Deficiencies from domestic areas are reallo­
cated to other domestic areas and to Cuba, and a Philip­
pine deficit is assigned largely to Cuba.
Whenever it appears that production in the domestic
beet area, the domestic cane area, Puerto Rico, or Ha­
waii might exceed its quota, the area quota is broken down
into specific allotments for each producer. Unlike other

G R O W IN G A N D PRO CESSING SU G A R BEETS
tems. Since it is not advisable to grow beets more than
once every three or four years, there are few farmers who
grow nothing but beets. Even so, sugar beets are grown
on about 10,000 farms in the District every year.
Except for short periods, the Twelfth District has al­
ways been one of the most important areas of sugar beet
production in the United States. As far back as 1916 to
1920, the District produced over 37 percent of the total
sugar beet output of the United States. During the curly-

The sugar beet is not one of the major crops in the
Twelfth District. During recent years, it has contributed
less than 5 percent to total cash receipts from farming in
any one District state. In terms of acreage, sugar beets
are even less important. Nevertheless, the sugar beet in­
dustry has played a significant part in the development
of a permanent system of agriculture in the irrigated re­
gions of several Twelfth District states. It not only pro­
vides a cash crop, but fits well into several rotation sys­




3

top infestation of the 1920’s the District’s share of total
output dropped more than one-half, but during the 1930’s
and the first half of the 1940’s it remained between 33 and
36 percent. The rapid expansion in production during the
last five years, particularly in California and Idaho, has
increased the District’s share of the nation’s beet output.
From 1946 to 1950, an average of over 42 percent of the
total domestic crop was produced in the District, a high
of 48 percent being achieved in 1948.

rental will range from $40 to $50 per acre. With the ex­
ception of water and taxes, the tenant assumes all expenses
and takes the full proceeds. Where the land is rented on
a share-crop basis, the owner’s share may vary from 20
to 50 percent of the crop, depending upon the agreed divi­
sion of growing and harvesting expense. In California,
where acreages are considerably larger, the percentage of
beet land which is rented is much higher, current esti­
mates being about 60 to 70 percent.

Sugar beets are grown commercially in all District
states except Nevada. Arizona’s acreage, in the Yuma
area, is negligible, and moderate acreages are planted in
the Yakima Valley in Washington and along the Snake
River in east central Oregon. In the three principal beetproducing states, California, Idaho, and Utah, acreages
are scattered throughout the states. In California, beets
are grown in the Sacramento, San Joaquin, Santa Clara,
Salinas, and Imperial Valleys, and the south coastal
region. The principal producing sections in Idaho are
stretched along the Snake River as it winds its way across
the southern part of the state. In Utah, where sugar beets
are more important than in other District states, acreage
is concentrated in the Ogden-Salt Lake area, with smaller
plantings scattered on down the state in the agricultural
valleys.

In addition to the usual sources of credit which are
available to most farmers, growers of sugar beets in some
areas of the District can obtain financing from their beet
sugar companies. Even though loans made by the com­
panies are limited strictly to the production of sugar beets,
growers often prefer them. Since the grower is usually
well known to the company, he can often obtain the cash
more readily than from a bank. Commercial bank loans
generally cover all crops grown by the sugar beet farmer.
Bankers usually consider loans on sugar beets as one of the
best crop loans because of the interest and help given the
growers by the beet sugar companies. Thus, financing is
not much of a problem to the average sugar beet grower
in the District.
The necessity for concerted action on the part of the
individual growers of agricultural products has been rec­
ognized for many years. Being largely a small independent
businessman, the individual farmer was too frequently
buffeted by the economic forces of the market place; his
own output was so small a part of the total supply put on
the market that he could not effectively bargain with
buyers; and his resources were so small that he could
not carry on research and experimentation. Marketing
cooperatives and farmers’ trade associations grew out of
these conditions.

Structure of the industry

The average size of sugar beet plantings in the various
states of the Twelfth District differs considerably, and in
some states there is considerable difference between areas
within the state. Based on the 1945 census, the average
acreage planted to sugar beets is smallest in Idaho and
Utah, 11 and 8 acres, respectively. In Washington and
Oregon, the average per farm planting runs about 23
acres, while California sugar beet farmers planted an
average of 84 acres to the beet crop. The greater part of
these differences among the states in per farm plantings
is merely a reflection of the differences in the average
size of farms and farming operations; it is not something
peculiar to the sugar beet industry.

There are three beet grower associations in the Twelfth
District— the California Beet Growers’ Association, the
Idaho Sugar Beet Growers’ Cooperative Association, and
the Utah Sugar Beet Growers’ Association. These organ­
izations represent their growers in contract discussions
with the sugar companies, carry out research, hold meet­
ings throughout the growing year on pertinent produc­
tion and harvesting operations, and represent the grow­
ers in the various state and Federal legislatures.

Similarly, differences in the size of average plantings
in various parts of California are due primarily to the
varying size of farming operations in these areas. Santa
Clara and Monterey counties had the smallest sugar beet
acreages per farm, averaging 54 and 67 acres, respec­
tively. Acreages in the Imperial Valley are well above the
state average, about 120 acres per farm. The largest acre­
ages of sugar beets are in Colusa County with 158 and San
Joaquin County with 207 acres per farm on the average.

The beet sugar companies have had a similar trade
organization for many years, the United States Beet
Sugar Association, to which all beet sugar companies in
the Twelfth District belong. Just recently, another trade
organization, the Western Beet Sugar Producers, Inc.,
has been formed in the western states, encompassing all
District producers in addition to one in Kansas and two
in Colorado. It has been commissioned to carry on an
intensive advertising and promotion campaign to increase
the sale and distribution of beet sugar. The need for such
a campaign will be mentioned later. Many sugar compa­
nies also belong to organizations engaged in research on
sugar and sugar beets.

The ownership pattern of land planted to sugar beets
varies considerably throughout the District. Most of the
smaller acreages are farmed by owner-operators; as acre­
ages increase in size, there is a tendency for more of the
land to be rented. By far the greater percentage of beet
acreage in Utah and Idaho is operated by owners. Esti­
mates place the percentage of tenant-operated beet land
at only about 5 percent in Utah and 15 to 20 percent in
Idaho. On good beet land in these two states, the cash




4

Beginning in the middle 1920’s, the sugar beet industry
in the Far West suffered many set-backs at the hands of
a virus disease known as curly top. Up to that time, do­
mestic growers were using imported seed from Europe
which was not resistant to the disease. Yields dropped off
precipitously, and many processing plants had to close
down. By the early 1930’s the United States Department
of Agriculture had developed a partially resistant variety
and the domestic industry was no longer entirely de­
pendent upon foreign seed sources. Since that time, many
additional and improved varieties have been developed
and made available to growers.
The ideal sugar beet variety would be one resistant to
curly top and to bolting (producing seed stalks), high in
yield, and high in sugar content. No one variety has yet
been developed with all these characteristics, but several
satisfy one or more. The varieties in use at present pro­
duce a multiple-germ seed capable of producing three or
more distinct plants. Much of the labor employed in the
growing of sugar beets is required because of the neces­
sity of thinning and separating these closely growing
plants. Some progress has been made in this regard by
the use of processed seed, seed which is broken into
smaller pieces with one or two germs. The improvement
and more extensive use of mechanical thinning, however,
must await the development of a single-germ seed which
will produce a uniform stand.

Soil and climate

The soil and climatic requirements of the sugar beet
are not nearly so restrictive as those for most other crops.
As a cultivated crop, it can be grown in many areas of the
world where other cultivated crops, such as corn or cot­
ton, cannot be grown successfully. The sugar beet is
grown in virtually all countries in the temperate zone on
a wide variety of soils and at elevations ranging from sea
level to altitudes of 7,000 feet. The crop exhibits a unique
resistance to the effects of alkali, which contaminates
large areas of land in the western states. Extensive recla­
mation of such land has been made possible in many in­
stances by the introduction of beet culture. Since the root
system penetrates to a depth of six or seven feet, the ma­
jor soil requirement is good depth and fairly high content
of humus or organic matter.
Sugar beets thrive best in areas where temperatures
are moderate and the growing season is long. Since the
beet matures in about six months, it is adapted to those
climates in which crops must be produced between the
late frosts of spring and the onset of the following winter.
An average summer temperature of 70 degrees is desir­
able for good culture.
Cultural operations

Though the soil and climatic requirements are not too
restrictive, the sugar beet must have an adequate supply
of water. In its growing season, a beet may take up as
much as 15 gallons of water and give it off through the
leaves. At harvest time, the root of the beet is 75 to 80
percent water, and the foliage 90 percent. As a result
sugar beets must usually be grown as an irrigated crop.
Sugar beets are also a rotation crop, that is, they are
grown alternately with other crops. It is actually neces­
sary to rotate sugar beets in order to control the sugar
beet nematode, a small worm that feeds on the root, but
because of the six months’ growing season, beets also fit
well into crop rotation plans. Ideal rotation plans include
a cultivated crop, a small grain crop, and a grass or
leguminous crop. Throughout most of the country, cotton
and corn are the principal cultivated crops used in rota­
tion patterns. In areas where these crops cannot be grown
successfully, sugar beet culture has reached a peak and
contributes recognizable benefits to a complete, wellrounded, agricultural program.

For the best development of the crop, the sugar beet
should be given as long a growing season as possible.
Though the plant is more frost-resistant than most, it is
not the usual practice to plant much before the danger of
severe frosts is passed. As a result, planting dates vary
with climatic areas. Since some varieties of sugar beets
have a tendency to bolt if planted too early, planting dates
will also vary with the variety used. In the Imperial Val­
ley of California, seed is often planted as early as Septem­
ber or October of the preceding year. Growers in the Sac­
ramento and Salinas Valleys plant in January and Febru­
ary. In most other parts of California and in the other
District states, planting dates usually extend from March
to May.
The growing of sugar beets requires considerable labor
and attention. Soon after the plants are out of the ground,
the thick stand resulting from the multiple-germ seed
must be thinned to leave single plants. Until recent years,
the thinning operations were predominantly done by hand
labor. During the last few years, the use of processed
seed has reduced the amount of work necessary in thin­
ning, and machines have also been perfected which do a
creditable job.

Almost any crop which can be grown in the sugar beet
areas will fit well into rotation with beets. The only re­
striction is that imposed by the nematode; those plants
which are host to the nematode, such as garden beets,
cauliflower, cabbage, and turnips, should not be a part of
the rotation; beans, potatoes, and alfalfa are the usual
crops accompanying sugar beets. Planting beets only
once in every three or four years is the usual recommen­
dation, though not the usual practice. Many growers are
still planting beets every other year or two successive
years and suffering varying degrees of nematode in­
fection.




Thinning is usually completed some time in June.
Thereafter until harvest, cultivation and watering are the
growers’ primary concerns. Of the four major beet-pro­
ducing areas in this country, the Great Lakes area and
the Red River Valley of Minnesota and North Dakota
are the only ones that depend on natural rainfall. Irriga­
tion is essential in all western sugar beet producing states
5

and experience has proven that light, frequent irrigations
give the best results.

storage at the factory. Later in the season, as tempera­
tures get cooler, beets can be stored for longer periods
without significant spoilage. Experiments in California
have shown that ventilated piles may be stored from N o­
vember to early December without too great a loss. The
increased use of machines for harvesting necessitates
completion of harvesting before the onset of the heavy
rainy season. Both controlled harvests and substantial
storage at the factory thus become more imperative.
The extraction of the pure, crystal-white sugar from
the dirty, topped root of the sugar beet is a fascinating
process involving largely chemical procedures. In brief,
the fundamental operations include extraction, precipita­
tion, filtration, evaporation, crystallization, and drying.
After delivery to the factory, the beets are washed, sliced
into long strips called chips or cossettes, which resemble
shoestring potatoes, and sent on to the first of the process­
ing operations.
Extraction of the sucrose from the chips is done by
submersing them in hot water in large tanks called dif­
fusion batteries or cells. The resultant products of this
operation are beet pulp (the exhausted chips) and raw
juice. The raw juice is next started on the road to puri­
fication. The object of these operations is to remove the
impurities which have been extracted with the sugar.
First, milk of lime is introduced to precipitate the im­
purities and then carbon dioxide is bubbled through to
precipitate the lime. These solids are removed by filtra­
tion. The resulting juice contains only about 10 to 12 per­
cent sucrose because so much water has been introduced
during the diffusion process. To remove this water, the
juice is boiled down in evaporators until the sucrose con­
tent is about 55 percent, and then further boiled in va­
cuum pans until crystallization begins. Not all of the thick
liquid crystallizes, and the resultant mixture of crystals
and syrup must next be spun at high speeds in centrifugal
machines to separate the white crystals from the liquid.
The sugar crystals are now more than 99.9 percent
pure sucrose, and after washing and drying, are ready
for packaging operations. The thick liquid obtained from
the centrifugal machines is reprocessed several times un­
til no more sugar can be profitably extracted by crystal­
lization. It is then known as molasses.

Harvesting

The beet puts on most of its weight during August and
September.1 When the leaves take on a russet tinge, the
farmer knows the crop is maturing and the sugar content
is increasing. The actual date for the start of harvesting
is determined by the sugar factory through field tests of
the sugar content of the beet. Each grower gets a delivery
schedule based on the capacity of the plant and the rela­
tive maturity of his and all other growers’ beets. In cen­
tral California, harvesting may begin in August. In most
other District areas,1 delivery to the factories starts in
September or early October.
The principal harvesting operations consist of lifting
the root from the ground, topping off the leaves, and
loading on trucks. When entirely hand labor is used, the
roots are first loosened and lifted with a tractor-drawn
beet lifter; the laborer then picks the beet up with his top­
ping knife and slices off the leaves and crown. The beets
are thrown into piles or windrows and later transferred
into trucks for transport to the factory or loading station.
Mechanical harvesters are of several kinds. Some ma­
chines lift the beets and then top, while others slice off
the top first and then lift the root from the ground. Many
machines now have loading belts attached so that lifting,
topping, and loading are all done mechanically.
Development of machines was increased during the
war when hired labor was not readily available, and re­
finements have continued since then. During the initial
period of development, some beet sugar companies pur­
chased machines and rented them to their growers. At
the present time, most machines in use are grower-owned,
and the balance is owned by contractors who may harvest
for several growers in a given area. Until recently, the
size of the machines available limited their use to plant­
ings of 100 or more acres. As a result, complete mechan­
ization of sugar beet harvesting has not yet been pos­
sible. In California, 75 to 80 percent of the acreage was
harvested by machine in 1950. In Idaho and Utah,
where acreages are smaller, about 60 and 50 percent,
respectively, were harvested mechanically. Further mech­
anization will depend upon the development of a machine
which will be practical to use on small acreages. One
such machine— a one-row harvester— has recently come
on the market and may be the answer. If it proves prac­
tical, there is no reason why sugar beets cannot be har­
vested almost entirely by machine in the near future.

By-products

Sugar has often been referred to as a by-product of the
sugar beet. Actually it is the most valuable portion of the
beet, and the products which result from the growing and
processing of the beet are properly termed by-products
of the beet sugar industry. These by-products come from
the two phases of the industry. The growing and harvest­
ing of the beets yields the crown and leafy tops. The ex­
traction of sugar from the beet root yields beet pulp and
molasses. These by-products comprise better than 90 per­
cent of the total weight of the plant. Almost the entire
vegetable portion of the sugar beet is left over for com­
mercial uses.
Without reference to sugar, the vegetable portion of
the sugar beet is important in its own right. Ever since

Processing the crop

Because of the perishable nature of the sugar beet, the
production period of the beet sugar factory is a relatively
short one. The beet root begins losing some of its sugar
as soon as it is out of the ground, which precludes long
VAll crop schedules in central and southern California are considerably
earlier than in other District beet areas. For example, harvesting in the
Imperial Valley generally extends from M ay 15 to July 15.




6

charcoal and numerous other chemicals; and as a source
of aconitic acid which is used in making plastics. The use
of sugar beet products in most of these outlets is not com­
mercially feasible at the present time, though research is
continuing intensively.

the first beet was sliced, the feeding of these by-products
to cattle and sheep has been an integral part of the whole
beet sugar economy. Many thousands of sheep and cattle
from the ranges of the western states are annually fat­
tened in the feed-lots of the sugar beet regions. The rise
of livestock feeding has been coincident with the expan­
sion in sugar beet culture.

Marketing the beets

The beet tops and crown, left after the harvesting oper­
ation, are utilized entirely for livestock feeding. Though
they lose much of their value if left lying in the field too
long, they are an excellent protein and fattening feed if
used promptly or silaged. The feeding value of tops from
an acre of beets is equivalent to one ton of alfalfa hay.
Since few growers own livestock, they generally rent the
fields for pasturage. Returns may be based on a per head
basis, on a per acre basis, or on the basis of the tonnage
yield of beets. Outright sale of the tops to dairymen and
livestock men for silaging is increasing.

Most producers of agricultural crops must give con­
siderable attention to the selling or marketing of their
crop. A market must be chosen, buyers contacted and
bargained with; information on current supply and de­
mand conditions must be obtained and analyzed; the crop
must be transported to market and in many cases graded,
washed and packaged. Since most commodity prices may
fluctuate considerably over the marketing period, the
farmer seldom knows what the price will be when his
crop is ready for market. And the final price is determined
by factors over which he has no control.

Beet pulp is also used almost entirely as a livestock
feed, in wet, pressed, or dried form. Wet pulp direct
from the processing plants is the most important by­
product of the sugar beet. It comprises an excellent
bulky, succulent, carbohydrate feed usually at a cost con­
siderably below the cost of comparable feeds. Since wet
pulp is a bulky product, most factories sell it to livestock
feeders in the immediate vicinity of the plant. Part of the
pulp that is not consumed wet is pressed to remove part
of the moisture, but most of it is dried. In the dried form
it is widely distributed throughout the United States and
is especially well fitted to the ration of dairy cows.
Unlike cane molasses, beet molasses is normally impalatable to humans and finds its way largely into livestock
feeding. As a carbohydrate concentrate, it is commonly
mixed with beet pulp or alfalfa hay. In addition to its
nutrient value, it adds palatability to the entire ration.

Unlike most farmers, however, the individual grower
of sugar beets need not concern himself with these prob­
lems. The economic characteristics peculiar to processing
and marketing the sugar beet crop have brought about an
industry structure which relieves the individual farmer of
the necessity of marketing his crop. And he also has fewer
uncertainties about the price he will receive for his output
since he knows before the crop is planted the basis upon
which he will be paid.
The principle characteristics which make for these con­
ditions stem from the processing aspects of the industry.
First of all, the sugar beet crop is both bulky and semi­
perishable so that it cannot be transported for great dis­
tances nor can it be stored cheaply and safely for long
intervals of time. Secondly, the initial outlay necessary
for the construction of a processing plant is so great that,
like the utility enterprises, the duplication of facilities
within a single territory is uneconomic. Thirdly, the proc­
essor must be assured of sufficient volume to make full
use of his plant capacity during the short processing pe­
riod in order to reduce unit operating costs to a minimum.

The uses of beet pulp and molasses are by no means
confined to livestock feeding. It is true that the greater
portion of these by-products are so utilized in normal
times, but other uses for them are many. Beet pulp has
been found to be a potential source of pectin. Though use
of pulp for this purpose has not as yet been developed
commercially, it was reported that Germany was using
sugar beet pectin in jams and jellies during World War
II. Molasses has hundreds of potential uses which could
be developed in the future. At present, beet molasses is
used in the production of yeast and the waste liquor de­
rived from further working of the molasses is a source of
glutamic acid, the new food flavorer. A specialized use
is its fermentation to citric acid, a process which has al­
most entirely displaced the older process which used citrus
fruits. The thousands of uses to which cane molasses can
be put may point to a greater consumption of beet mo­
lasses in the future. Cane molasses has always been one
of the principle raw materials for the production of ethyl
alcohol; it is used in the manufacture of high protein
yeast for both cattle and human foodstuffs; it can be used
as a fuel, as a composition board binder, as a source of




One of the first effects of these conditions is that the
crop must be grown in relatively close proximity to the
processing plant. The great advances in the speed and
availability of transportation have increased the prac­
tical distance between field and factory. Even so, some
geographical limits are placed on the growing of beets.
And the raising of beets is thus restricted to those farmers
who own land or who can rent and operate reasonably
close to a plant. This does not necessarily mean that a
rapid expansion of acreage could not be accomplished.
Since the acreage in sugar beets in any one year in a
given area is small relative to total acreage in crops in that
area, the expansion potential is large.
The second effect of these conditions in the industry
is that the producer of sugar beets ordinarily has only a
single market for his crop— the plant of the nearby proc­
essor. There are only a few areas in the District where the
plants of two different processors are close enough to
allow the growrer some choice in selling his crop. The
7

the Government. One California company, as an added
inducement to growers to continue selling to that com­
pany, agrees to use the average net return of the com­
peting processor in the area if that return is higher.
Timing of payments: Even though the average net re­
turn, and consequently the rate of payment to the grower,
is not known until the end of the marketing year six to
eight months after harvest, initial payments are made to
growers shortly after they deliver their beets to the proc­
Grower-processor relationships
essor. The rate of this initial payment is based on antici­
The contract: Because the processor must be assured pated company net returns in the light of the current sell­
of sufficient volume to make full use of his plant capacity, ing price of sugar. This payment, historically, has repre­
a contract is entered into by both the grower and the sented 80 to 90 percent of the final rate. An additional
processor prior to the planting of the crop. The processor payment is often made in December or January. Within
is thus assured of as much volume as his plant can handle one month after the close of the sales year, final payments
and the grower is assured of a market for his crop on a are made to adjust the rates to the actual average net
predetermined price basis. According to the contract, the returns of the company.
grower must deliver and the processor must accept all
Advice and assistance: As a result of the contractual
beets grown on the contracted land. The grower is bound relationship between the growers and the processors of
to deliver the beets in a cleaned and topped condition at sugar beets and because of the desire of the processor to
whatever times and places the company may dictate. In receive beets with as high a sugar content as possible, the
Utah and Idaho, the grower must pay all expenses of relationship between the processor and the grower is
trucking his beets to the factory or loading station. In probably closer for sugar beets than for most other agri­
California, the sugar companies give the growers a haul­ cultural crops. On the one hand, the processor is inter­
ing allowance to help meet these expenses.
ested in the efficient production of high-yielding and highRates of payment: The rates of payment are printed on quality beets on the part of the grower. The grower, like­
the contract and depend, for each grower, upon two fac­ wise, wants to get as high a return per acre as possible.
tors— the average net return of the company and the Consequently, all sugar beet processing companies employ
sugar content of the beets. In California the average sugar agronomists, entomologists, agricultural engineers, agri­
content is determined for each grower’s entire crop. In culturists, and fieldmen who are constantly attempting to
Utah and Idaho, the sugar content of the beets is deter­ improve varieties, combat pests and diseases, improve
mined either for all beets sliced by the company during production techniques, mechanize farming operations,
the season or the average sugar content for beets sliced and in general, aid growers in every way possible. The
from a certain district. This tends to take away some of processors, through their fieldmen, may suggest and rec­
the incentive on the part of the grower to grow beets with ommend varieties, production methods, or harvesting
high sugar content. Apparently, to offset this, the rates of techniques. Though the growers are not bound to fol­
payment for corresponding sugar contents and net returns low such advice, most of them do.
are higher in Utah and Idaho than they are in California.
As a group, sugar beet producers probably receive
The average net return, used as the other factor in more advice and aid in their production and harvesting
arriving at the rate of payment to growers, is determined operations than does any other producing group. Com­
by subtracting from the average gross sales price received pany fieldmen spend most of their time visiting and ad­
for all sugar sold by the company during the sales year1 vising growers from pre-planting time through harvest.
all costs of selling and marketing such sugar2 and by de­ As a result, relations between the companies and their
ducting the excise tax on refined sugar which is paid to growers are excellent and have contributed to a stable
harmonious industry. Even though processors in some
1The sales year for California companies is from August 1 to July 31 of the
following year. In Utah and Idaho, the sales year runs from October 1 to
areas represent the only outlet for the grower’s crop,
September 30.
their attitude toward their growers is one of paternalism
* In contrast to the usual practice, beet sugar companies do not deduct pro­
cessing costs in calculating average net returns for rates of payment to
rather than of exploitation.
growers.

existence of this single market for the producer gives the
processor, in some degree, a buyer’s monopoly. In the
earlier stages of growth of the industry, this fact may
have caused considerable controversy between the grower
and the processor. Today, however, the terms offered by
beet sugar factories are quite uniform. In addition, the
trade associations formed by the growers give them con­
siderably more bargaining power.

PRODUCTION TRENDS
severe outbreak of curly top drastically reduced output
in all District states and actually halted production in the
state of Washington where sugar beet culture had just
been successfully started. By 1935, however, the United
States Department of Agriculture had successfully de­
veloped curly top resistant varieties and the industry
once again started expanding.

In addition to the influences of price and demand con­
ditions, the acreage and production patterns of sugar
beets in Twelfth District states have been markedly af­
fected by diseases, competition from other crops, and the
supply of farm labor. After the establishment of success­
ful beet sugar factories around the turn of the century, the
industry grew rather rapidly. During the early 1920’s, a




8

P R O D U C T IO N O F S U G A R B E E T S — T H R E E T W E L F T H
S T A T E S , 1918-50

much of the land taken out of cotton, wheat, and other
crops with acreage restrictions was planted to sugar beets.
The 209,000 acres of sugar beets harvested in California
set an all-time record and Idaho’s growers planted an
acreage second only to 1947. If it were not for the fact
that growers must have a contract with a sugar company
before planting, acreages might have been even higher.
Most District companies refused thousands of acres at
sign-up time last spring. California’s record production
pushed the District total to a new record high. Total
United States output will also be the highest on record.

D IS T R IC T

Thousands

Yield per acre and sugar tonnage per acre

Most producers of agricultural crops, once they have
the crop in the ground, are interested in one thing— the
yield per acre which they will get. Sugar beet growers, on
the other hand, are concerned primarily with the number
of pounds of sugar they will produce per acre. Sugar ton­
nage is determined by the tonnage yield of beets per acre
and the sugar content of the beets. More can be done
through cultural practices to increase the beet yield per
acre than to increase the sugar content. Less is known
about the various factors that influence the final percen­
tage of sugar which a beet will contain. As the beet ma­
tures, more and more sugar is sent to the root for storage.
If vegetative growth stops for a time and then starts
again, however, the stored sugar is depleted.
Since the return per acre depends upon the yield of
sugar per acre, data on the yield of beets per acre gives
only half the picture for any one season. An individual
grower may get high returns per acre if the beet yield
is low and the sugar content high, or if the sugar content
is low and the beet yield high. For the United States,
sugar content has averaged about 15 or 16 percent, with
variation from 12 to 20 percent from grower to grower
and from year to year. Though the beet yield per acre for
any one year is not a reliable indication of the sugar out­
put of a given area, the long time trend in yields does
show the effect of improved cultural practices, disease
control, and the use of better adapted varieties.
In all three important District states, yield of beets per
acre has been increasing steadily over the last 35 years.
Year to year fluctuations in the yield have been pro­
nounced largely because of changes in weather and preva­
lence of disease, but the long-time upward trend has per­
sisted. The big jump in yields in the early thirties came
with the use of domestically developed varieties resistant
to curly top. Since that time, improved cultural prac­
tices, a greater use of rotation plans, and the development
of higher-yielding and more disease-resistant varieties
have all improved yields. Both California and Idaho, in
recent years, have been getting yields double those of 35
years ago, and Utah’s yields have increased 50 percent.
Since the middle 1930’s, District yields per acre have con­
sistently been above the United States average.

Source : United States Department of Agriculture, Bureau of Agricultural
Economics.

During World War II, several factors caused cutbacks
in the production of sugar beets in District states. Exces­
sive stocks of beet sugar, following three years of record
production, made necessary in 1941 the first acreage re­
duction in the continental beet area since the introduction
of the sugar quota system in 1934. No allotments were
necessary in 1942, however, and production increased.
A combination of factors resulted in a precipitous de­
cline in both acreage and production in 1943. Even though
sugar beets had the benefit of a price support program,
these support prices were not high enough in relation to
the support and market prices of other competing crops.
In addition, the supply of farm labor had become increas­
ingly short. It was not until 1946 that production ap­
proached pre-war levels in the District. By that year,
sugar beet growers were receiving more than twice the
prices they received in 1940, and mechanization, particu­
larly on the larger farms, had gone a long way towards
ameliorating the tight labor situation.
Supplies of sugar available to the United States in­
creased during 1946 and 1947. Domestic and Cuban pro­
duction had increased to such an extent that stocks were
considerably above prospective domestic demand at the
start of the 1948 season. The resultant decline in raw
sugar prices prompted sugar beet growers to reduce their
acreages for the 1948 crop year, and a further reduction
was made in 1949.
Record crop in 1950

Another factor entered the picture as growers were
planning their 1950 plantings. For the first time since the
war, acreage allotments were being imposed on several
important District crops, releasing 1y million acres for
planting to other crops. In addition, the market and sup­
port prices of many crops which compete with sugar beets
for land had been declining since the middle of 1948.
Though sugar beet prices had dropped some too, .they
had not decreased as much and growers were, of course,
still getting their conditional payments of about $2.50
per ton from the Government. As a result of these factors,




Factors influencing output

District sugar beet production fluctuates considerably
more from year to year than production of most other
9

expansibility of sugar beet acreage arises from the fact
that most beet growers have only part of their total acre­
age in beets.

S U G A R BEET Y IE L D

PER A C R E — T W E L F T H D IS T R I C T S T A T E S
A N D U N IT E D STATES
Five-year averages, 1916-20 to 1946-50

Another factor, which is tied in with rotation, is disease
control. One of the principal reasons for rotation plans
when growing sugar beets is to prevent the spread of
nematode. Even when rotations are followed, the preva­
lence of this disease may cause acreage reduction in cer­
tain areas. Curly top, which once practically wiped out the
industry, is no longer the danger that it was. Last year
bears testimony to the hardiness of the resistant varieties
now being grown. Infestation of curly top in the Central
Valley of California was the worst since the disaster of
1925, yet the damage was negligible.
As with more and more crops these days, Government
programs and their attendant restrictions and regula­
tions must be considered by the farmer in planning his
crop year. The Sugar Acts under which the whole sugar
industry has been operating since 1934 authorize the use
of acreage allotments to cut down production when the
Secretary of Agriculture finds it necessary. Allotments
have been given to growers several times over the last fif­
teen years, but in only one year, 1941, did the allotments
require an actual reduction in acreage. With world pro­
duction of sugar increasing, beet growers may have to
reckon with allotments in the future.

Source : United States Department of Agriculture, Bureau of Agricultural
Economics.

annual crops. The various factors which make for these
wide variations in output are reflected through either the
acreage planted or the yield per acre, the two items which
determine total production. Particularly in Utah, and to
a lesser extent in Idaho and California, there have been
more year-to-year changes in production than in acreage,
indicating that changes in the yield have been more im­
portant in causing production variation than have changes
in acreage.
When a farmer is determining whether or not to plant
sugar beets, and how much to plant, he considers the same
factors that most growers of annual crops consider : name­
ly, the price he received the preceding year and the pros­
pective price for the coming year ; the labor requirements
of the crop in relation to the labor supply and to his
equipment ; weather conditions during the past year, at
planting time, and as expected during the coming year ;
and the competitive position of sugar beets with respect
to their alternative crops. In addition, however, the pros­
pective sugar beet grower must take into account several
other factors in planning his beet acreage. One of these,
which is especially important to the owner of the land,
is the rotation plan which is being followed. Since sugar
beets must, or at least should, be used in rotation, such
patterns act as a deterrent to flexible crop acreages. Some
growers do plant sugar beets on the same ground for two
or three successive years in times of high prices or a short
sugar supply. But as a general rule owners are reluctant
to break up the rotation pattern from year to year. The

The wide variations in the yield of beets per acre, which
are largely responsible for the fluctuations in production
from year to year, are caused primarily by weather and
disease conditions. Cultural practices and the extent of
irrigation and fertilization are important, but District
farmers have attained a certain method of production from
which they do not vary much from year to year. Though
the sugar beet is more frost resistant than most cultivated
crops, early plantings may be severly damaged by frost
or even by cold weather. Any shortage of water will, of
course, hinder the full development of the beet.
In addition to curly-top disease and nematodes, sugar
beets are plagued by many other diseases and insects of
lesser importance. Damage from curly top on a large
scale has been nullified by the use of resistant varieties,
but local damage can still occur if proper cultural opera­
tions are not carried out. Nematodes are quite prevalent,
especially in Idaho and Utah, and can seriously reduce
yields when infestation becomes heavy. There is no effec­
tive means of eradicating them; they can only be kept
under control by proper rotation practices.

BEET SUGAR
As mentioned earlier, the rate of payment which the
grower will receive for his sugar beet crop depends upon
the sugar content of his beets and the net return which
the company gets for the refined sugar when marketed.
The beet grower has nothing to do with the marketing of
the sugar produced from his beets, nor has he, through
his growers’ association, engaged in promotion or adver-




tising programs to the extent that other agricultural pro­
ducers have. Even so, he is vitally concerned with the
profitable distribution and sale of the final product,
° üses su9or*
Most people are probably not aware that almost as
much sugar is used by industry as is used on dinner tables.
10

Since the war, an average of 43 percent of the total civilian
consumption of sugar has gone into industrial uses and
57 percent has been used on the tables of households and
institutions. In the years before the war, industrial use
was somewhat less, averaging about 31 percent; during
the war industry took over 50 percent of the total.

profitable prices. Intense competition exists between indi­
vidual companies and between the cane and beet segments
of the industry. The most significant effect of this Govern­
ment restriction of sugar supplies is that once the quota
has been determined, the market price for sugar is de­
pendent almost entirely upon demand factors.

The baking industry is the largest single industrial
user of sugar, followed closely by the bottling trade. Large
amounts are also used in canning and preserving, in the
curing of meats, and in making candy and ice cream.
Sugar is equally necessary for making flavoring extracts,
syrups, and miscellaneous products, such as pickles, rel­
ishes, breakfast cereals, chewing gum, and salad dress­
ings. In the nonfood industries, sugar is used in scores
of curious and unsuspected ways— in hair tonics and shoe
polishes, in adhesives, photographic materials and explo­
sives, in tanning leather and silvering mirrors, and as a
necessary ingredient of pharmaceuticals.

Beet sugar marketing
problems

Even though the total amount of sugar that can be
placed on the United States market is limited by the Gov­
ernment, beet sugar companies must engage in aggressive
selling of their product. In most areas of the District there
are several beet companies putting sugar on local markets.
In addition, there is one large cane sugar refinery in the
District which competes with the beet companies. Compe­
tition between these sources of supply, in conjunction with
many other factors, limits the markets which are available
to the beet sugar processors.

In many of these uses, sugar is used in forms other
than the standard, hard, granulated grade. Some uses re­
quire a soft, spongy type of grain. Others may require a
hard, sugar crystal of larger or smaller size than that made
for table use. Considerable quantities of sugar for indus­
trial use may also be marketed as liquid sugar, a thick,
high-purity syrup. Cane refineries can produce liquid
sugar by stopping the refining process before crystalliza­
tion, but beet factories must crystallize the sugar and then
re-melt it. Similarly, cane refineries make brown sugar
by processing residual liquors which contain molasses.
Since beet molasses is not palatable to humans, beet proc­
essors must add cane molasses to beet sugar in order to
market a brown sugar.

Basing point system and market areas: One of the most
important limitations upon the marketing of beet sugar is
a geographical one. Since sugar is marketed under a bas­
ing point system, profitable market areas are definitely
limited. The basing point pertinent to far western markets
is San Francisco. This means that a sugar company, in
selling its sugar, charges the buyer transportation costs
from San Francisco to the buyer’s location. A refined
sugar buyer in Seattle, Washington, for instance, must
pay the base sugar price plus transportation from San
Francisco no matter where the seller’s factory is located.
If he buys from the sugar company in the Imperial Val­
ley in California, he pays only the transportation charges
from San Francisco to Seattle. The sugar company must
absorb as an added cost the transportation charges in ex­
cess of those from San Francisco to Seattle. If the Seattle
buyer obtains his sugar from the factory in Toppenish,
Washington, he still must pay the transportation charges
from San Francisco to Seattle. In this case, the Toppen­
ish sugar company “ picks up” the difference in transpor­
tation charges as added revenue. The net result of this
system is that beet sugar companies selling in markets
reasonably close to their plants make higher net returns
than either cane or beet companies who must ship some
distance into those markets. Thus the whole Intermoun­
tain area is a pick-up area in which local sugar factories
receive phantom freight. Companies outside the area can
and do sell in that area, but sales made there are less
profitable than sales made closer to their factory sites.

Competition keen despite
quota system

Throughout the short history of the United States, the
protection of the American market for the domestic pro­
ducer has been a conviction held by policy makers in our
Government. Tariffs, import duties, and other restrictive
measures have long been used to preserve the home mar­
ket for American agriculture and industry. Domestic su­
gar producers, however, are further protected from for­
eign competition by use of the quota system. The Secre­
tary of Agriculture, in setting the total quota needed for
domestic consumption, practically assures that the Amer­
ican market will not be glutted by a surplus. Other agri­
cultural groups have tried through marketing co o p e r ­
atives, marketing programs, and other schemes, to curtail
the supply of their product that is placed on the market,
but none have been able to do it so well and with so much
Government assistance as have the producers of sugar.
Limitation of the total supply of sugar placed on the
market in any one year does not preclude competition in
the industry. It does prevent serious over-supply of the
market and ensures, theoretically, that all the sugar pro­
duced or refined in the United States will find a market.
It does not ensure that any individual beet company
or cane refinery will be able to sell all its production at




The principal markets for California beet sugar com­
panies are located in the Pacific Coast states. The larger
companies who produce more than can be sold in these
areas must sell their excess in the south-western states
and in the St. Louis-Chicago area where competition from
Intermountain and New Orleans processors is keen. Beet
sugar companies in Utah and Idaho supply the Intermoun­
tain area almost exclusively, but since that market is
relatively small they must also sell in the mid-western
states. Companies which sell east of the Rocky Moun11

tains must meet intense competition since sugar beets are
grown in every state except Missouri in the area from
the Utah-Idaho borders to Michigan and Indiana. In
addition, cane refineries located around New Orleans—
the basing point for the Mid-west— ship heavily into the
mid-western market area.
Packaging: The market for beet sugar is further limited
by the fact that until recently no beet sugar company
marketed a complete line of packaged sugar. Cane refin­
eries have packaged granulated, powdered, cube, and
brown sugars in small units for many years, wrhile the
beet sugar producers packaged only larger units of gran­
ulated. Since refined sugar is largely a homogeneous prod­
uct, grocers usually stock only one brand, and it is logical
that they stock the brand with the most complete line.
Beet processors, who could offer granulated sugar only,
have had a difficult time getting their product on the
grocers’ shelves and have had to confine themselves
largely to the industrial and institutional market. At­
tempts to remedy this situation are currently being made
by several District beet companies. Two California proc­
essors now market a complete line of specialty sugars in
small consumer packages, and several processors in the
Utah-Idaho region have recently added one or two of the
specialty sugars to their granulated line.
Consumer prejudice: The beet sugar industry has not
been able to get its share of the household market for an­
other reason. Housewives evidently hold a prejudice
against sugar made from beets. In the infancy of the in­
dustry, this prejudice may have been justified. Equipment
and techniques were new and untried and quality often
varied. These difficulties have been corrected for many
years but the prejudice still seems to remain. To a much
smaller degree, a similar situation exists among industrial
users. Since both cane and beet sugar are 99.9 percent
pure sucrose, any differences in the 0.1 percent non­
sugars present can be detected only by exacting chemical
tests.

Beet sugar versus cane sugar: As a result of these
various conditions, considerably more of the District’s
beet sugar finds its way into industrial and institutional
outlets than onto consumers’ tables. Roughly 60 percent
of the District’s beet sugar output goes into the former
two outlets, the remainder going into household use. In
supplying the industrial and institutional market, beet
processors have been more than able to compete with
cane sugar. In 1948, for example, beet sugar companies
supplied more than three-fourths of the industrial market
in the West.
Traditionally, refined beet sugar has been quoted for
10 cents per hundred pounds less than cane sugar on
western markets. (In the Mid-west the differential is 20
cents.) This differential applies in the household market
where preference for cane sugar is stronger. In the indus­
trial market, cane sugar is generally sold at the same price
as beet sugar, since most industrial users will not pay
the higher price for cane sugar.
The effects of the basing point system on cane and beet
processors are somewhat different. The District’s one
cane refinery is located within 30 miles of the basing
point, San Francisco. On most of its sales in western
markets, therefore, it receives very little pick-up. Most
District beet processors, on the other hand, have several
factories in different parts of the District. On sales to
markets close to factory locations they may receive sub­
stantial pick-ups.
When Twelfth District cane or beet processors sell in
the mid-western market, however, they must absorb some
of the transportation costs since they are farther from the
mid-western market than is the basing point of New
Orleans. District beet processors are at a further disad­
vantage in that they must reduce their base prices another
10 cents below the cane price. Obviously, transportation
charges absorbed by western beet processors on sales to
mid-western markets are an offset against the phantom
freight received on sales made in local western markets.

PRICES AND RETURNS
Actually, the price of refined sugar, like the price of
all goods and services, is determined ultimately by the
forces of supply and demand. The various supply and de­
mand factors operating in the sugar industry, however,
are probably more complex than those that affect the
prices of most other agricultural commodities. For in­
stance, the price of strawberries in Sacramento on any
given day is dependent largely upon the total number of
crates arriving at the market that morning, the supply
and price of other fresh fruits, the level of consumer in­
come at that time, and probably the weather. There are
many more factors influencing sugar prices and their in­
terrelationships are more complex.
Refined sugar prices eventually rise and fall with the
raw sugar market. Though the refined and raw sugar
markets are separate and distinct, the price of refined
sugar, either cane or beet, is based largely upon the cost

Most producers of agricultural commodities cannot sig­
nificantly influence the price they receive for their crop.
Once a crop has matured it must be harvested and sent to
market, and the price the grower gets depends largely
upon the supply of that commodity placed on the market
at that time and the demand for the commodity at that
particular time. Sugar beet growers, likewise, cannot do
much to affect the price they receive for their crop, but for
somewhat different reasons. They can, in a limited way,
influence the sugar content of their beets, one of the pricedetermining factors, but once the crop has been harvested,
the farm price depends upon the price the processor is
able to get for the refined sugar he extracts from the beets.
Consequently, the various economic forces which affect
the sugar industry do not reflect directly on the farm
prices of sugar beets, but upon the prices of refined sugar,
both cane and beet.




12

of raw sugar to the cane refiner. Generally cane refiners
establish their quoted refined prices by adding to the
current cost of raw sugar their various processing and
administrative costs. Since beet sugar has always been
quoted at a discount under the cane price, the raw cane
market is as important to the beet sugar refiner as to the
cane sugar refiner.
Supplies and prices

Timing of sales: Some persons believe that the supply
side of the sugar price picture is determined each year
when the Secretary of Agriculture sets the sugar quotas
for the coming year. It is true that the quota determines
the total amount of sugar that may be placed on the
United States market during the year and this exerts a
strong influence on United States prices. Though the total
supply that can be placed on the market may be limited,
the timing of sales of both raw and refined sugars through
the marketing year can exert price influences on the
United States market. Timing of sales may be affected by
sugar supplies in the exporting sugar countries, particu­
larly Cuba. If Cuba has a large crop, she may be under
more pressure to sell her United States quota in a short
period of time, thus putting a downward pressure on
United States market prices. A relatively small crop
would likely produce the opposite effect.
The timing of sales may also be affected by the length
of the processing period. In some areas which supply the
United States market, the crop is harvested during a four
to six months’ period. As a result, the processors have,
during a short space of time, a tremendous financial and
storage burden which often may force selling of raw sugar
through necessity. Beet sugar processors have a similar
storage and financial problem. The sugar beet crop is har­
vested and processed during a short period of time and
must be held for many months if the processor is to have
a continuity of offerings. An unusually large crop, lack of
adequate storage facilities, a low level of working capital,
or difficulty in obtaining financing, may force selling in
less profitable market areas where the company must ab­
sorb some transportation charges.
The supply of sugar placed on the market at any one
time may also be affected by costs of production and gen­
eral economic conditions in the areas supplying the United
States market. Differences in average production costs
from area to area and from mill to mill make some areas
more willing than others to sell at a certain price. Differ­
ences in economic conditions between areas often cause
one area to press sugar on the market more aggressively.

Demand and prices

World demand: The demand side of the sugar price
picture is no less complex than the supply side. Though
the demand for sugar refined in the United States is con­
fined entirely to the continental United States, the de­
mand for raw sugar on the world market may significant­
ly affect United States prices. The influence of world de­
mand on the United States sugar market is reflected pri­
marily in the aggressiveness or lack of aggressiveness with
which quota countries, particularly Cuba, sell to the Unit­
ed States. If world demand is off, these countries are
obliged to rely on their United States quotas, thereby
bringing a greater concentration of sugar on the United
States raw market in a shorter space of time than would
be the case if world demand were greater. The opposite
is true, of course, when world demand is high, as was the
case during 1950. An active demand in the world market
absorbed pressures to sell that generally exist at the start
of Cuba's crushing season, and strength was given to
the United States market.
Consumer and industrial demand: The demand for re­
fined sugar in the United States comes from two sources
-— industrial users, and households and institutions. The
characteristics of these two demands are quite distinct.
Statistical studies have shown that the demand for sugar
from institutions and households is relatively stable. Con­
sumer demand for sugar does not change appreciably
either with changes in the price of sugar or with changes
in the incomes of consumers. Compared with per capita
disposable income, sugar prices have gradually decreased

Location of sugar producers: The geographic distribu­
tion of sugar production in the United States is another
important factor affecting refined sugar prices. Beet sugar
production is concentrated in California, the Intermoun­
tain states, and the Michigan-Ohio area. Domestic cane
production is located in Florida and Louisiana. Cane
refineries which use imported raw sugar are concentrated
on the Atlantic Coast and in the New Orleans area, in
addition to the one on the Pacific Coast. More sugar is




produced in each of these areas than can be consumed
locally, so that supplies placed on the markets are often
in excess of demand. In addition, surplus supplies from
most of these producing areas are shipped to mid-western
markets. As a result, there is keen competition in this
area and in the producing regions.
Response to price changes: One other characteristic
of the supply side of the sugar industry must be mentioned
as it affects sugar prices; that is, the reaction of sugar
production to price changes. In the short run, sugar sup­
plies do not increase or decrease appreciably in response
to sudden changes in demand or prices. A sharp increase
in demand will consequently result in a sharp rise in sugar
prices, and a drop in demand will cause prices to fall.
Over a longer period, however, sugar supplies are quite
responsive, either to changes in demand, tariff protection,
or preferential treatment. In the early thirties, expansion
occurred under tariff protection in many importing coun­
tries, particularly the United Kingdom, India, and the
continental United States. As a result of preferential
treatment for their product, there was also a substantial
increase in output in some exporting areas, notably in the
Philippines, Formosa, Australia, and the Union of South
Africa. The short-run inelasticity of sugar supplies, either
upwrard or downward, tends to accentuate price fluctua­
tions. Conversely, the greater elasticity in the long-run
tends to mollify long-run price fluctuations.

13

over the last 40 years. Today, the expenditure on sugar is
a relatively insignificant portion of the consumer’s yearly
food budget.1
In contrast, demand from industrial users is relatively
flexible. Since more than half of these users of sugar pro­
duce what are sometimes referred to as semi-luxury prod­
ucts, their demand is responsive to changes in consumer
incomes. Furthermore, in most industrial uses, other
sweetening agents, such as corn sugar, compete with
sugar. Industrial demand for sugar, consequently, is also
affected by the price of sugar in relation to the price of
these competing sweeteners.
Another differentiating characteristic between indus­
trial and household demands is the seasonal pattern of
demand throughout the year. Demand from consumers
for home and institution use is fairly constant during
most of the year, with some rise in the summer months
because of home canning. The pattern of industrial use,
however, is markedly seasonal, rising sharply in the
spring, remaining high during the summer, and falling
off sharply during the fall and winter. This pattern is the
result of the increased consumption of bottled beverages
and ice cream, and the intensive operation of the canning
industry during the summer months.

S U G A R P R IC E S IN R E L A T I O N T O P R IC E S O F O T H E R F O O D S 1
and
PER C A P I T A D IS T R I B U T I O N O F S U G A R ,1 1860-1950
Relative price
per pound
(centi)

Pound* per capita
(row sugar)

T T T n r n T Tm TTTTTjTI TTITTT 1"TTrnTTTT" r r m T n r r r n r r n T 1111 m 111 i i i n j n r i T i n i i r r i

r\

/Iy

Jelafive price o f sugar

KI

(1a ft^hand sc-ale)

A A ill À
•

V

—w —

111111M11

lllLLUa

.u

w,
i

w

>er capi ta distribution
(righi -h a n d scale)
I

....

i m 111111 ,1,11.0111.1 ■ii.jjjjm i i m 1111111m m 111 m

11 I l L L U l .LLLLiilLL

1 W holesale price of sugar divided by index number of wholesale prices of
all foods (1935-39 — 100). 3 Quantity distributed by primary distributors
divided by population.
Source: United States Department of Agriculture, Production and M ar­
keting Administration, S u g a r R e p o r t s , December 1950, p. 2 6 .

Price trends

The type of market a particular refiner serves may also
affect the demand for his product and the price he re­
ceives. The amount of his production he sells to industrial
users, the amount he sells for household use, the propor­
tion of his output that he sells each year under continuing
commitments— all these determine the ease or difficulty
he may have in disposing of his output and the extent to
which he may have to make price concessions to move his
production. Those refiners who have a good part of their
output committed to specific industrial users or wholesale
grocers year after year will not be so pressed to make
price concessions as refiners who may have only a small
portion of their output committed.

In spite of the fact that sugar price fluctuations have in
general followed the fluctuations in the general price level
over the years, sugar has become cheaper and cheaper to
the American consumer. Two relationships give clear evi­
dence of the increasing cheapness of our principal sweet­
ening agent. In relation to the prices of other foods, the
price of sugar has declined greatly over the past 90 years.
An almost identical trend is evidenced if the price of sugar
is related to per capita disposable income. Since 1910, the
cost of a pound of sugar has represented a lower and lower
percentage of American consumers’ disposable income.
During that period, sugar prices in relation to income
have decreased over 60 percent.
These decreasing relative price trends over the years
have largely been the result of increased production
bringing about greater competition for the United States
market, more intensive cultivation, more efficient proces­
sing, and technological developments in both production
and processing.
With a few exceptions actual sugar prices at the various
levels of distribution have generally followed the infla­
tionary and deflationary trends of the whole economy.
Premature decontrol in the spring of 1920 allowed sugar
prices to shoot up sharply, but they fell with equal abrupt­
ness a few months later. In contrast to the gradual in­
crease in most other agricultural prices, sugar prices
gradually decreased during the 1920’s, largely as a result
of the increased production in the areas supplying the
United States market. Since 1940, sugar prices have risen
less than the prices of other farm products.

1 Per capita consumption of sugar is close to 100 pounds a year. H alf of
this is bought in the form of sugar, the rest being purchased indirectly in
prepared products, such as soft drinks, bakery goods, etc. For the average
family of three persons, the yearly expenditure for direct purchases of
sugar, at present average retail prices, comes to only $15.

Retail and wholesale sugar prices have followed re­
markably similar patterns over the years. The equivalent
prices received by sugar beet growers have also followed

Factors influencing individual
sugar company prices

All these factors obviously come into play in determin­
ing the average refined sugar price in the country as a
whole. Likewise, they affect the price an individual refiner
may receive. In addition, however, there are several fac­
tors which, though less important on the national market,
are often quite significant to the individual refiner or
processor. Since most beet sugar companies do not mar­
ket a complete line of packaged sugar, they cannot sell on
an even basis with the cane refiners because the grocer
does not wrant to be inconvenienced. Those handling lim­
ited lines, consequently, must often sell at a discount. At
times when the refined sugar market is dull, the complete
assortment refiner may have to cut his prices to keep his
share of the market.




14

this same general movement, but the year-to-year fluctua­
tions have been much more frequent and of greater mag­
nitude, the usual case for prices at the farm level.
The big boost given to farm prices by the Government
sugar programs, which began with the 1933 crop, is clear­
ly shown in the accompanying chart. Payments to grow­
ers from 1933 to 1935 were made under the JonesCostigan Act which was made inoperative in 1936 along
with the A A A . Payments were again resumed in 1937
with the passage of the Sugar Act. The basic rate of 60
cents per 100 pounds of recoverable sugar afforded grow­
ers somewhat higher payments than they received in the
earlier period. In 1942, the rate was increased to the
present figure of 80 cents. When ceiling prices were
established on sugar during World War II, growers re­
ceived, in addition to their Sugar Act payments, price
support payments in order to bring forth needed produc­
tion and insure growers fair returns. These price support
payments further increased the equivalent prices growers
received during 1943, 1944, 1945, and 1947.

S U G A R P R IC E S: R E T A IL , W H O L E S A L E , A N D E Q U I V A L E N T
P R IC E R E C E I V E D B Y B E E T G R O W E R S , 1914-50
Cents p er
pound

N o t e : This chart is plotted on a semi-logarithmic scale on which equal ver­
tical distances represent equal percent changes rather than equal absolute
amounts.
1 U. S. average, U. S. Bureau of Labor Statistics. 2 N ew Y ork, net cash,
Production and M arketing Administration, Sugar Reports. 3 U. S. average
price received by growers per pound of refined sugar extracted from their
beets. Computed from data in Sugar Reports.

Grower returns

Most agricultural producers either sell their products
in wholesale markets or sell them outright to agricultural
processors. Their return for their products, therefore, de­
pends solely upon the price they receive, less any selling
commissions or transportation charges. Sugar beet grow­
ers, on the other hand, do not sell for a specific price after
harvesting their crop. Nor is their return dependent solely
on the interplay of supply and demand factors on a par­
ticular market. The price the processor gets for the refined
sugar is, of course, important to the grower. But the
grower’s share of the total net returns received by the
processor is equally important in determining the grow­
er’s final return for his crop.

coupled with the increased factory recovery rate, has
meant that processors have increased their production of
sugar from a ton of beets from an average of 230 pounds
in 1901-05 to 290 pounds during 1941-45. Obviously this
increase has reduced the unit costs of refined sugar and
allowed processors to return a greater proportion of their
net returns to the grower.
If refined sugar prices increase from one year to the
next, it is more than likely that a processor’s unit costs
will not rise accordingly. Thus, he is able to give the
grower a greater portion of his net returns per unit. That
this is done is clearly brought out in an examination of
the payment schedules in the sugar beet contracts. For
example, one California processor returns to growers
whose beets have a 12 percent sugar content 42 percent of
the net return he receives for 120 cwt. of the growers’
sugar when the net return per unit is $4, and 56 percent
when the net return per unit is $8. Growers whose beets
have a 24 percent sugar content receive shares of 48 and
58 percent,1 respectively, at net returns per unit of $4
and $8. Sugar beet growers, consequently, profit more
than growers of most other agricultural products when
the prices of their products increase.

Data published by the U. S. Department of Agriculture
show that the percentage of the total net returns received
by United States beet growers has been increasing over
the last 35 years. In 1916, growers were getting only 35
percent of the net returns received by processors. From
then until 1930, their share increased steadily, reaching
a high in that year of 67 percent. With the advent of the
depression, the growers’ share dropped off and varied
between 47 and 49 percent until 1940 when it began in­
creasing again. Over the last five years, growers have
been receiving an average of 58 percent of the total net
returns taken in by the processors.
The gradual upward trend in the growers’ share of total
net returns has been partly due to the increasing efficiency
of processors in extracting sugar from the beet. In the
early days of the industry, around 1900 to 1910, proces­
sors were recovering about 77 percent of the total sugar
in the beets. Technological developments in processing
operations gradually increased extraction efficiency. Beet
factories have averaged 87 percent extraction in recent
years. The sugar content of beets has increased only
slightly during the last half century, from about 15 per­
cent to 16 percent. This slight increase, however, when




The characteristics of the demand for sugar also make
it more profitable for growers when sugar prices are high.
It has been mentioned before that the demand curve for
sugar is relatively inelastic, that is, the consumption of
sugar does not change much when prices change. When
this is the case, the total returns to producers are greater
when prices are high than when prices are low.
1A t any given net return for the com pany the grower receives a greater per­
centage of the total net return the higher the sugar content of his beets.
The increase in the percentage share, however, goes up faster with increases
in the net return to the com pany than with increases in the sugar content.

15

A V E R A G E P R IC E S R E C E I V E D B Y F A R M E R S F O R S U G A R B E E T S
and
I N D E X E S O F P R IC E S R E C E I V E D F O R S E L E C T E D G R O U P S O F
C O M M O D I T I E S —U N I T E D S T A T E S , 1925-50
Dollars per ion
Percent

su9ar beets

when farm prices are on the upswing. The possibility of
growing more profitable cash crops was one of the reasons
for the sharp reduction in sugar beet production during
the war years.
The greater stability in sugar beet prices, and, conse­
quently, returns, is brought out in the accompanying
chart which compares the relative changes in the farm
prices of sugar beets and competing crops. Grower prices
for beets decreased less than for competing crops during
the early 1930’s and have increased less since then.
Though this characteristic works to the advantage of beet
growers when farm prices are declining, they are placed
at a disadvantage when farm prices rise.
Returns from sugar beets do not fluctuate so much as
the prices of most competing crops, primarily because of
the payments received by growers under the Sugar Act.
These payments over the last ten years have represented
from one-fifth to one-fourth of the total returns. The dol­
lars and cents amount of the payment, of course, does not
change when farm prices drop. This tends to keep sugar
beet returns from falling as much as returns from other
crops. In addition to the regular conditional payment, the
deficiency and abandonment payments tend to take some
of the risk out of sugar beet growing. Though these pay­
ments seldom amount to more than $15 per acre, they at
least cover part of the costs incurred by the grower, and
probably increase the competitive position of the sugar
beet.

N o te : This chart is plotted on a semi-logarithmic scale on which equal ver­
tical distances represent equal percent changes rather than equal absolute
amounts.

Competitive returns

Sugar beets are not known as a big money crop in the
terms that wheat, cotton, or truck crops are. Their repu­
tation is rather one of providing reasonable profit year in
and year ou t; a crop which isn’t likely to make the farmer
rich in a few years but will provide him with a steady in­
come. Because of this, sugar beets must meet serious com­
petition from cash crops for the use of land, especially

FUTURE OF THE INDUSTRY
Few farmers can look to the future with as great a
feeling of security as can the growers of sugar beets. This
feeling of security does not arise from the certainty that
prices and incomes will continue to be profitable into the
indefinite future. It stems, rather, from the greater degree
of favoritism, protection, and assistance received by sugar
beet growers from both the Government and the sugar
companies. As a result of Government programs, grow­
ers can expect protection from excessive market supplies
and a continuation of their subsidy payments. Their very
close relationship with the sugar companies means that
they do not have to face future problems alone. Most of
the individual production problems of the grower are
taken over by the companies who can devote more time
and resources to their solution. In addition, marketing
problems with which most agricultural producers must
be concerned do not confront sugar beet growrers.
Grower problems

Production techniques, from planting the seed to har­
vesting the mature beet, have changed considerably since
the inception of the sugar beet industry in the United
States. Many problems have been solved, and the most
serious ones have been lessened. The pests and diseases
which once threatened the existence of the industry have
largely been brought under control by the use of diseaseresistant varieties, cultural practices, and crop rotation.




16

Processed seed was developed to reduce the amount of
labor required in thinning the stands and to permit more
rapid mechanization of this operation. Though no serious
production problems exist at present, the industry is car­
rying on extensive research along many lines.
Varietal improvements : Exceptional improvement has
been made in sugar beet varieties during the past 20
years. Much remains to be done, however, in developing
varieties adapted to the varying growing conditions of
the western states. All Twelfth District areas need a va­
riety which will produce a higher sugar content. Growing
areas in central and southern California need a variety
with less tendency to bolt so that advantage can be taken
of the favorable fall growing weather. Such a variety
could be planted earlier and harvested earlier, thus
lengthening the processing period and easing the end-ofseason rush.
Mechanization of many production and harvesting
operations has introduced several problems. A variety
which produces a single-germ seed with a high germina­
tion rate would help to hasten more widespread use of
precision planting and mechanical thinning. Mechanical
harvesting could be more efficient if beets were more uni­
form in shape and height. Intensive research along these
lines is being carried on by Federal, state, and industry
specialists, and some significant progress has been made.

beets into his farm plan. Some of the factors which a
grower must consider in planning his sugar beet acreage
have been mentioned earlier. Probably the two most im­
portant are the competitive position of sugar beets and
the value of beets in rotation plans. The use of sugar beets
as a rotation crop has long been advocated and most
farmers are well aware of their value. With more and
more stress being laid on diversification and a well round­
ed farm plan, sugar beets should attain greater impor­
tance in District agricultural areas.
Returns: From a strictly economic viewpoint, sugar
beet growing should be in a stronger position in the fu­
ture. It is entirely possible that sugar beet prices relative
to prices of competing crops will improve. There is in­
creasing evidence of public dissatisfaction with the farm
price support program. Elimination of support or at least
reduction in support levels is a possibility at some future
date. The sugar program, on the other hand, has not re­
ceived the attention that the price support program has.
The public knows much less about the sugar program,
and criticism has been negligible. As a result, it is much
less likely that payments to growers under the sugar pro­
gram will be reduced or eliminated than that price sup­
ports will be lowered or done away with. If the latter did
happen, the prices of some of the crops which compete
for land with sugar beets would fall relative to sugar beet
prices. The greater possibility of additional mechanization
should also improve the competitive position of beets rela­
tive to other crops. As this is accomplished, production
costs will decrease; there will be less dependence upon
seasonal labor; and net returns will rise. Sugar beets,
which now have the reputation of fitting well into rota­
tion plans and providing a dependable source of income,
should become increasingly profitable relative to other
crops.

The recent development of hybrid varieties should give
new impetus to the breeding program. The development
of new varieties, however, is a slow process and the results
of current study will not be available to growers for at
least several years.
Mechanization: The extremely high labor requirement
of sugar beet production has been one of the industry’s
most important problems. Historically, the labor situa­
tion has prevented improvement in the competitive posi­
tion of the beet crop. At the present time, the mechaniza­
tion of harvesting operations has been practically com­
pleted on the larger District acreages. Minor refinements
are still needed to make the operation more efficient. Most
of the inefficiencies, however, probably must be corrected
through plant and cultural improvements— such as single­
germ seed, more uniform root size, precision planting,
mechanical thinning, and weed control— rather than
through improvement in harvester design.
Machine harvesting has not progressed nearly so far
on the smaller sugar beet acreages as it has on the larger.
The recent introduction of a small harvester will permit
small growers to take advantage of the lower costs of ma­
chine harvesting. Growers who find it uneconomic to pur­
chase a harvester could still reduce their costs by renting
a machine or hiring a custom operator.
With no mechanical harvesting, about 75 to 85 manhours (as much as 100 man-hours on the smaller farms
in Utah and Idaho) are needed to grow and harvest an
acre of sugar beets. This compares with about 35 manhours for alfalfa, 20 for beans, and 6 for barley. With
mechanical topping and loading, beet labor requirements
can be reduced about 25 man-hours. Machine harvest,
however, does not complete the mechanization of sugar
beet production. Precision planting and the mechaniza­
tion of thinning and weeding would effect additional sav­
ings in labor and costs. Developments along these lines
are awaiting solution of the problem of uniform seedling
emergence. A variety which produces a single-germ seed
has been developed experimentally, but uniform seedling
stands cannot be attained without higher germination
rates, uniform moisture and depth of planting, and well
prepared seed beds. It is not likely that thinning and hoe­
ing will ever be completely mechanized. Since the prob­
lem is largely one of developing new varieties and per­
fecting pre-planting and planting operations rather than
one of engineering, further mechanization will be slow.
When it can be accomplished, however, it does promise
further cost reduction and an improvement in the com­
petitive position of the sugar beet.

Industry problems

As with beet culture, processing techniques in the beet
sugar industry have evolved to a point where few basic
changes can be expected. Technological advance in equip­
ment and extraction processes has been steady. The most
recent major change has been the development of the
continuous diffusion battery. Future changes in factory
operations will consist largely of refinements of present
processes. One refinement recently adopted by several
District companies is the storing of granulated sugar in
silos for reprocessing or repackaging later during the
marketing year as demand requires. This is considerably
less expensive than the older practice of bagging and
storing in warehouses and will undoubtedly become more
widespread.

Rotation: Though the above problems have been listed
as grower problems, they are actually important to the
whole western sugar beet industry. As such, they are
being dealt with on the industry level and the individual
grower is largely leaving their solution to beet company
and Government specialists. There is one problem, how­
ever, which each grower must face and solve in the light
of his own conditions. That is the problem of fitting sugar




The seasonal nature of factory operation seems in­
evitable in beet sugar production. Yet the possibility of
prolonging the annual working period or utilizing the
factory between seasons is an attractive one. The need
for extending the processing period has been brought
into sharper focus by the advent of mechanical harvesting.
17

Since these machines cannot work in muddy fields, it is
necessary to complete harvesting before the advent of
the rainy season. Beets are thus delivered at a faster rate
than they can be processed. If beets could be safely stored
at the factory, harvest could proceed as quickly as pos­
sible and the factory could process to capacity. Some rea­
sonably successful experiments have been conducted by
one California company. The results indicate that ven­
tilated piles may be stored from late October to early
December, for a period of 40 to 50 days, without too great
a risk. Two promising means of lengthening the proces­
sing season may be found in plans for storing diffusion
liquor and dehydrating and storing beet chips which are
being studied in California. Both this plan and the stock­
piling of beets at the factory hold promise as a means of
reducing processing costs and achieving more efficient
factory operation.
The processing or manufacture of products not con­
nected with the sugar beet industry could also reduce the
time factories stand idle. Some preliminary work has been
done in California with processing starch, glucose, and
sorghums. A less certain opportunity for utilizing beet
sugar factories during the off-season lies in making use
of sugar beet by-products and the waste materials of the
extraction process. Considerably more research is needed,
however, to develop products with commercial value.
Even when this is done, producing such products would
require additional capital investment on the part of the
companies in the form of new equipment. No develop­
ments along these lines can be counted on for some time
to come.
Over the years, persons connected with the sugar in­
dustry in the United States have paid more attention to
the supply side of the picture than they have to tiemand.
They have attributed most of the ailments of the sugar
industry to changes in supply conditions. That these
changes are important is obvious, but it is becoming in­
creasingly apparent that the industry can no longer over­
look demand factors. From almost the beginnings of the
industry to the middle 1920’s per capita demand increased
steadily. (See chart on page 14.) Since then, however,
per capita consumption has leveled off and even declined
slightly. It is obvious, of course, that the depression and
war-time controls were influential in this change. But
even during the last four years, when consumer incomes
were relatively high and sugar prices relatively low, con­
sumption per person has not regained the level of the
1920’s.




Whether or not per capita demand for sugar is declin­
ing, it is fairly certain that it is not continuing its steady
increase of pre-depression days. Statistical evidence also
indicates that neither an increase in consumer incomes
nor further decreases in sugar prices can be counted on to
increase per capita sugar consumption appreciably. This
is particularly true for household and institutional de­
mand. (Industrial demand is more responsive to price
and income changes.) It seems, therefore, that the sugar
industry would be well advised to actively promote new
uses for sugar, particularly in the industrial line.
In addition to this problem, which affects the entire
sugar industry, the beet sugar segment has long had the
problem of increasing the demand for its product. Beet
processors have supplied their share of the industrial
market for many years, but demand from household users
has not been on a par with the demand for cane sugar.
The lack of complete packaged lines of specialty sugars,
which has been the major deterrent in gaining a greater
share of the household market, is gradually being reme­
died. Within several years most of the beet processors in
the District should be able to offer complete lines. Then
the problem will be one of stimulating household demand
for beet sugar.
The District beet sugar* industry has already made
some significant strides in increasing its share of the wes­
tern sugar market. Since the war, beet sugar deliveries
in the West have increased relative to total sugar deliv­
eries. Last year, beet sugar made up more than half the
total deliveries of sugar. The aggressive advertising cam­
paign of western processors should result in a continua­
tion of this trend. Even though per capita sugar demand
may be leveling off, the greater relative increase in popu­
lation in the western states will mean an increasing total
consumption of sugar here.
In order to continue increasing its share of this total
market, however, the beet sugar industry must stabilize
its output to a greater extent than it has in the past. Dur­
ing and immediately following W orld W ar II, for in­
stance, sharp cutbacks in District beet production resulted
in decreased beet sugar deliveries in spite of the fact that
total market demand remained high. The problem is
largely one of improving the competitive position of sugar
beets so that beet production will be maintained at a high
and stable level year after year. The close working rela­
tionship between the grower and the company and the
intensive research being carried on to solve existing prob­
lems should help bring this about.

18