American Crystal Sugar’s 2012 Profits Fall Sharply

November 29, 2012 | By | Reply More

American Crystal Sugar recently disclosed its 2012 financial results showing that the sugar beet processing cooperative has seen its costs rise and profits sink during the first full year since it locked out 1,300 workers represented by the Bakery, Confectionery, Tobacco Workers, and Grain Millers International Union (BCTGM) in August 2011.

Some highlights of the annual report include:

  • Profits have fallen.  Net proceeds fell more than 30% in fiscal 2012 to $555 million, compared to $811 million for the fiscal year that ended August 31, 2011.  The amount received by growers per ton of beets fell more than $14 to $58.67.  In contrast, farmers at Minn-Dak Farmers Cooperative are projected to receive $74.05 per ton in 2012. Western Sugar expects $82.70 per ton, and Michigan Sugar expects $87.74 per ton.
  • Production is down.  Tons of products produced and sold declined more than 15% in fiscal 2012, to the lowest level in a decade.  Production of molasses – a less valuable product compared to sugar – grew 124% due to storage problems and production delays.
  • Debt continues to rise.  Short-term debt increased to $110 million at the end of August 2012, a 66% increase from the $66.2 million in debt at the end of fiscal 2011, and a 2100% increase from $5 million in debt at the end of fiscal 2010.  American Crystal had its lender increase its line of credit by $60 million.
  • CEO pay remains high.  CEO David Berg received $1.7 million in total compensation in 2012, including take-home pay of $659,000.

American Crystal Sugar’s annual report shows that the ongoing lockout has contributed to a spike in the cost of sales and lower profits.  Union members said that these results should cause growers to question management’s unyielding demands for steep concessions by workers.

“Beet farmers who are shareholders of American Crystal Sugar are getting less money per ton,” said Renae Fredrickson, a locked out member of BCTGM Local 167G who is also a shareholder. “Shareholders would be in a much better position today if the company had used the money spent for the lockout on improvement and maintenance of the factories to ensure a prosperous future, with a goal of annually planting and harvesting 100% of the available shares. With a bumper crop coming in this year, we will not want to lose out again if the lockout continues.”

John Riskey, president of BCTGM Local 167G, called on American Crystal Sugar’s management to reconsider its hardline approach to the lockout, saying that “CEO David Berg now has the opportunity to realize that he has taken the company in the wrong direction.  As the ACS annual report shows, cost-cutting at the expense of trained and experienced workers has been very short-sighted and damaging.”

Category: News

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