Beet growers to be honored at Scottsbluff dinner

Beet gr~wers to be honored at Scottsbluff dinner

Howard Ardissono of Oshkosho His father , Joe, started gro~ing beets in the Valley in 1910, the year the Scottsbluff factory started operations.

Fred Vogel of ~itchell. His father , Peter, now 92 years old, started growing beets in 1918 north of Morrill.

Employees to be recognized at Scottsbluff dinner •.••

Sabin G. Hooper, superintendent at Scottsbluff, second generation member of a three-generation Great Western family. His father was Harry W. Hooper, a pioneer Great Westerner who ~as assistant general superintendent at Scottsbluff for more tha~

JO

i~ Jerry Hooper, a member of the sugar sales staff at the General Office,

Aui3ie Heldt, agriculturist in the Baya·rd factory district, His father was Gus Heldt, who spent

64

atter the turn of the century. He served as agricultural superintendent for the Valley districts until his retirement in

194

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Remarks by R. R. Owen, President of The Great Western Sugar Co., At the Scottsbluff Country Club, Scottsbluff, Nebraska,

February 5, 1969

Thank you, Leonard.

Mr. Mayor and friends:

We at Great Western are honored to have this opportunity to speak

before such an important group as this of sugarbeet growers and community

leaders. We are grateful that you have taken time out of busy schedules

to break bread with us and to spend a few hours in fellowship.

We are proud to be a part of the ag~icultural and business community

of this important area of Nebraska, and to have been associated with it for

more than half a century. It is therefore a pleasure for GW management

officials and for me, personally, to be able to~ight to meet and to chat

with farmers, landowners, bankers, legislators, government officials,

business neighbors, and friends.

I am going to talk about 4 matters tonight. I will discuss the sugar

business generally, something about agriculture, something about our parent

company -- Great Western United, and something about our operations here

-2-I'd like first to tell you something about the 1968 record crop of

sugarbeets. The sweetness and fullness of that crop will, through payments

to growers, put lots of sugar into the economic bloodstream of this area

--about $119 million worth, according to the economists.

As best we can now estimate, total gross cash receipts for the 1968

crop will total about $17 million, including Sugar Act payments. Economists

state that agricultural payments turn over seven times in a conununity. So,

on that basis, the gross payments to area beet growers will generate about

$119 million of total business for all of you and your counterparts in this

general area. Add to that our payrolls, freight payments, and supply

purchases, and you have millions more.

Now, here are some general facts about sugar.

In calendar 1969 American consumers will use about 11 million tons of

sugar. This is equal to about 100 pounds per capita, the same average

consumption that Americans have been eating for many years. Since our

population, of course, includes persons of all ages and sizes, it is fairly

safe to say that we eat about our weight in sugar each year. About 25 percent

of this is purchased directly by housewives and restaurants, and the other 75

percent is purchased by industrial users for the manufacture of such things as

Of the total sugar to be distributed in the United States, about

30 percent will be beet sugar, and 70 percent will be cane sugar. The

United States beet sugar industry is found on both coasts -- Maine and

California -- and extends from Montana to Texas. Cane sugar for America

comes from Louisiana, Florida, Hawaii, Puerto Rico, and 31 foreign countries.

The American beet industry is the largest single supplier to the American

market and furnishes 2-1/2 times as much sugar as the next largest supplier,

the Philippines.

Great Western United markets about 25 percent of this country's beet

sugar and, therefore, about 7 percent of all sugar consumed in the United

States. In Nebraska about 85 percent of the sugar consumed comes from beets.

The Nebraska production from the 1968 crop totaled about 306 million pounds

-- more than all the sugar consumed in Nebraska in a year.

Since so much of the economic welfare of Nebraska is dependent on a

healthy agriculture, I am sure most of you, as I, are concerned with the

declining position of agriculture, generally .

. • By the exceptionally high efficiency demonstrated since World War II,

farmers have become a minority group with lessened political importance.

Today less than 6 percent of the nation's population lives on farms. In

-4-Thirty years ago the agricultural worker produced enough food for 10

persons. In 1967 he produced enough food for 40 persons. And, as you know,

Americans now eat better than ever before.

But farmers have not reaped their proper share of the rewards for such

efficiency. They have not done as well as consumers who now pay for food the

lowest percentage of their spendable income in history less than 18 percent

in 1967. In 1900 it was 40 percent; in 1950, 22 percent; and 1960, 20 percent.

At least, thank goodness, returns for sugarbeets are on the rise. The

1967 crop set an all-time high. The 1968 crop gives every indication of

setting another new record.

Among our guests tonight are officers and directors of the sugarbeet

growers association and also a number of outstanding persons who have been

the backbone of the beet business in this area for many years. I wish time

would permit my introducing all of these men and telling you something about

each of them. But that would be imposing too much on your time.

I would, however, like to present a few of them as representing all the

other growers and GW employees here tonight. ·'

We first want to pay tribute to a beet-growing family from around

Oshkosh. The father began raising beets in Nebraska in 1910. His sons

are now prominent growers and cattle feeders. One of them is here tonight.

He has been the high station beet grower at Oshkosh many times. Representing

his family and all of the other beet-raising families in the eastern end of

the North Platte Valley is Howard Ardissono.

We now go to the western end of the North Platte Valley in Nebraska to

honor another outstanding beet-growing family. The father, 92 years of age,

started working and growing beets north of Morrill in 1918, 51 years ago.

He and his sons have frequently earned High-Ten and high station grower

awards. They are prominent cattle feeders. It is my privilege to present,

from Mitchell, Fred Vogel.

Representative of the operating staff here tonight is a second-generation

member of a 3-generation GW family. His father was a pioneer Great Westerner

who was assistant general superintendent at Scottsbluff for more than 30 years.

The grandson is employed in the sales department of the General Office in

-Sa-From the agricultural department is a man from Bayard whose father's

name and the start of sugarbeets in western Nebraska are synonymous. His

father spent a total of 64 years in sugarbeet agriculture, many of them in

the Valley. He retired in 1948 as agricultural superintendent of the

Nebraska district. Here tonight is a GW agriculturist who bears a proud,

important name -- Augie Heldt.

Now it is my privilege to present a man who fills a dual role. He is

a Valley landowner and is a retired GW employee. Starting with the Company

as a fieldman at Bayard in 1917, he became assistant to the manager at

Lyman in 1936, manager there in 1938, and then manager of the Mitchell and

Lyman districts in 1940. He retired in 1959 to active service with the

J-A-J ranch at Minatare. Spending his entire sugar company career in

Nebraska, he has seen the amazing developments that have taken place here

in 52 years. He was not only of great help to the beet growers, but he

trained many of the top men in the present GW agricultural organization.

When you applauded these men, you were paying tribute to all the beet

growers who contract with Great Western and all the men at our factories.

Now let us turn to this year's beet sugar production. The entire

industry, as well as Great Western, will produce a record volume. In the

case of the industry, production is up about 30 percent from a year ago,

while in the case of Nebraska, production is up about 44 percent from last

year.

This upswing in production could not have come at a better time,

because our industry for three straight crops had made less sugar than

its calendar-year marketing quotas under the Sugar Act. Congress is quite

likely to consider extension and revision of this statute in the present

legislative session. Even though the Sugar Act doesn't expire until the

end of 1971, efforts probably will be made this year to revise some of

the quotas. If beet sugar production had not bounced back this year, our

-7-During the past year I have had the opportunity to learn a great deal

about that Sugar Act and to appreciate its merits. Some of you have had

the jump on me and have long recognized this law as the only American farm

legislation that really works. But, for those of you who haven't studied

the Sugar Act in detail, I'd like to examine with you some of its elements.

First, through regulation of supply, the Secretary of Agriculture has

managed to keep the price of raw cane sugar at New York very close to the

target price provided in the Act. Congress wanted a price goal that would

be fair to consumers and to the sugar industry, and therefore tied the

target to the parity index established in the Agriculatural Adjustment Act

of 1938. So, the raw sugar price increases in almost exact parallel with

inflation.

This inflation insurance protection is then made available to the beet

growers who contract with Great Western by the tie-in in our purchase agreement

with the average New York price. We guarantee that our net return from sugar

to be used for beet payment purposes will not be less than the sum of the raw

price and the average margin our nets have been above that price in recent ~

years. There is no crop besides sugarbeets that has this type of payment

floor. And wouldn' t our entire agricultural economy be better off if all

Second, the Act provides for an annual review by the Secretary of the

fairness of the sharing arrangements in the beet contracts between the

grower and the processor. In 1967 he determined that the grower should have

a larger slice of the "pie," thus increasing grower profits and reducing

processor profits. Great Western adopted these higher payments for beets in

196 7 and, in the 1968 contracts, implemented these with "floor" and "ceiling"

provisions, which were not required in the Secretary's 1967 findings.

The sharing of the net return is also unique to sugarbeets. Contrast

this arrangement, for example, with the flour miller and the wheat farmer.

The miller purchases wheat at a firm price regardless of what price he gets

for his flour. On the other hand, the oeet contract for 47 years has

permitted the grower to share in the good fortunes of the marketplace.

To give you an illustration of the combined workings of the Sugar Act,

the beet purchase contract,- and the sugar market, here is what has happened

in Nebraska between the Sugar Act's base period, 1957-59, and 1968 with

respect to a ton of average quality sugar content beets. The price paid

growers by Great Western has increased 22 percent while the parity index ·'

-9-If sugar prices increase above the present market, the growers will

receive 62 percent of the increment, which is also their present share of

the total net return under the current scale. Including conditional payments

which they receive under the Sugar Act, growers get 66 percent of the total

of net return and payments, or almost twice as much as the Company's 34 percent.

What a boon such an arrangement would be for other crops!

The attractiveness of the returns for the 1968 crop is demonstrated by I .

the fact that Great Western has requests from growers for acreage that exceeds

our capacity in a number of factory areas.

Using the identical sugar content in both years, we find that, in comparing

1968 with 1966, the growers' price has gone up 99 cents a ton, a 7 percent

increase, while the Company's share has declined 47 cents, or a reduction of

5 percent. The parity index has gone up 6 percent.

That falling off of Great Western's margin, coupled with increased cost,

has forced the Company to seek other means to offset inflat1on, which I'll

Since about a year ago, Great Western Sugar has been part of a larger

enterprise, Great Western United. But we wil l continue to operate as a

sugar company. It is our management's objective to maintain and improve

our leading position in the beet business. New opportunities are open to

us in that by being part of a larger, diversified organization, we can call

upon more experts than heretofore in the fields of management, marketing,

and research, to name but a few of the areas I believe will add a strong

plus to the sugar business. Also, we have gained added financial strength

and a willingness to increase investments in new facilities and modernization

to enhance efficiency.

At a recent meeting of the Q~U board of directors, new authorizations

extended to $29 million the investments which Great Western is making in

expansion of brick, mortar, and equipment. We must earn profits adequate

to justify continuing investments on this scale if we are to survive as an

important unit in the sugar business. In the obituaries of· this industry

are the names of several once-fine corporations which, because they couldn't

make ends meet, couldn't generate confidence of investors to undertake

~

-11-This leads me into one of the problems facing beet growers and Great

Western -- what to do about a foreign-bred seed known as Zwaanpoly. Under

disease-free conditions, it appears to be a high-yielding variety, and

might provide more net receipts to.the grower and more beet volume to keep

our factories running. On the surface of things, this would seem to be a

bonanza for everyone. However, in tests at USDA laboratories and in some

of the GW areas where disease was prevalent, Zwaanpoly has been shown to

be highly susceptible to disease.

Some growers want to grow Zwaanpoly, and perhaps one can't blame them

if there were no dangers. In the absence of disease, returns might be

excellent. But, under moderate disease outbreak conditions, some of these

growers could be hurt financially and, in addition, some of their neighbors

who planted GW varieties, which are resistant but not immune to leaf-spot

and curly-top, could also be hurt financially.

Some growers seem to be willing to assume this risk, or seem to doubt

that is exists, and think that perhaps the Company should not object because

we could ship beets from other factory areas to balance factory loads if one

area should be seriously affected. However, the specter of a serious disease

outbreak reducing yields, sugar content, and purity over an entire factory

area haunts me. These are what caused the closing of the American Crystal

factory at Grand Island, Nebraska, a few years ago. I'm worried by the

problem of the appeals of short-term gains versus the risks of serious

economic impact on growers, the Company, and the entire community.

For these reasons, we propose a very cautions approach in 1969, as was

followed in the 1968 crop.

A second factor of importance to the Company is that in our many tests

in 1968, Zwaanpoly had the lowest average sugar content and purity of all

beet varieties tested in every location. This means that it costs the

Company more to extract the sugar from Zwaanpoly beets than from GW varieties,

and the percentage of extractable sugar is lower. Therefore, t~1ese beets

&re of less value to GW than varieties having better extraction. It's

somewhat like the difference in value between No. 1 and No. 2 corn and

-13-Last but not least, Zwaanpoly is a multi-germ seed variety. This

is a step backward in our program to reduce reliance on field labor for

thinning.

And now I should like to talk about a subject that came up frequently

last summer and fal l in the election campaigns -- platforms. Only I 'm

going to talk about the Great Western platform.

It is based largely on 3 R's -- review, research, and returns. While

we are proud of our past, we are not satisfied to rest on laurels. We are

reviewing results achieved over 63 years of corporate existence to ascertain

which accomplishments to build on, which techniques we can improve, which

practices we should discard, and which'new avenues of operations are open

to us. We have greatly stepped up our research budget and research staff as

part of this program. We are dedicated to try, to the fullest extent possible,

to improve financial returns for the beet growers who contract with us, for

When I use the word "research," I do not limit it to Great Western

personnel. The American sugarbeet industry is fortunate to have the

cooperation and scientific contributions of many other dedicated experts.

Some of these men are at the University of Nebraska. Others are with the

U. S. Department of Agriculture and the Beet Sugar Development Foundation.

We will continue to lean heavily on these research men who have earned the

respect and gratitude of all of us.

We are seeking means more fully to utilize our factory capacity and

to recover more sugar from beets. That is where research becomes so

important. If we can find ways to reduce sugar losses in the beet piles ,

we might be able to withstand some of the onslaughts of inflation, and

continue to pay our growers as big a slice of the sugar dollar as we do

now. We can stretch our maintenance and fixed costs over a greater base

if we can find additional uses for our factory equipment. That is why we

have acquired the assets of Moore's Lime Company, of Springfield, Ohio, to

learn whether we can manufacture commercial lime and thus more fully use some

of our lime kilns, now idle eight and nine months of the year. That also is

,

,

why we have invested in Northland Research Company, of Minnesota, to see

whether it is possible to run sweet-stalk sugar corn through sorne·of our

-1

5-This corn has an ear without kernels and therefore sugars are

concentrated in the stalk. We have run into some severe problems, but

the important fact is that we were willing to take a chance and are still

trying to make the project succeed. This might add another cash crop for

farmers in some of the beet growing areas.

We will continue to seek to obtain the highest net sugar dollar

possible, to reduce our selling expenses wherever possible, and to

introduce new package lines and services to attract new customers in

more favorable sales areas.

Our platform calls for constantly striving to improve the lot of

beet growers in several ways in addition to seeking the highest net

return obtainable for our sugar. We continue to ~earch for better methods

and techniques to make beet growing more profitable and easier. An

example of this effort is the GW Service Center here at Scottsbluff for

We encourage Great Westerners to be good citizens and good neighbors. ;

We are interested in the well-being of the communities in which we live and

work. We encourage employees to become members of churches, service clubs,

civic organizations, PTA's, and the like. Leonard Henderson, for instance,

has been a director of the Chawber of Commerce , and is a trustee of Hiram

Scott College, and a director of the Scottsbluff Community Chest. Great

Westerners have been neighbors to you for a long time, and we hope we have

been good neighbors. We want to get along even better in the future if we

can. For instance, we pledge our continued efforts in abatement of air and

stream pollution. In t,ds regard we have already made important strides

fon,ard, concentrating first on the more serious problems.

We instigated at Bayard in 1954 the settling basin technique for handling

waste water. Now all of our factories have either constructed settling basins

or have modified systems arising out of the Bayard undertaking. We also have

lime retention ponds, and at Gering we have screens for removing organic matter

from the waste water: All Nebraska factories return pulp press water to the

diffuser thus eliminating this waste problem.

·'

This year at Scottsbluff we will complete a new pulp dryer. This will do

away with the drainage and odor from the wet pulp silo and the old potash pit.

-17-At Gering and Scottsbluff we have had fly-ash collectors in use for

some time.

We will continue our efforts to meet and, if possible, exceed

Government deadlines on abatement of air and water pollution. In the last

13 years we have spent more than $15 million in all of our factories as a

contribution toward cleaner air and water. Additional sums will be spent as

time and new technology become available.

So, as you can see, as good neighbors, we are trying to do our part in

the abatement of air and water pollution.

One other plank in our platform is not to keep guests too long at our

dinners. That being so, I 'm going to stop this talk in a matter of seconds.

But, before saying "goodnight," may I thank you again, on behalf of

Great Western, for being with us at this get-together and also for your

friendship, help, and cooperation over the years. Goodnight and a safe

journey home.

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