Sugarland: Inside Minnesota’s massive, powerful sugar industry

By: - November 17, 2023 7:00 am

A worker sits on a ventilation pipe at an American Crystal Sugar piling site near Ada, Minnesota, on Oct. 10, 2023. Photo by Madison McVan/Minnesota Reformer.

This story was made possible by a grant from Center for Rural Strategies and Grist.

EAST GRAND FORKS — The sugar beets are scattered like gray, misshapen rocks on the shoulders of the roads leading to East Grand Forks. That’s the first sign that the October harvest is underway. 

Then there’s the smell — earthy, vegetal, sweet — drifting from the smokestacks at the American Crystal Sugar factory at the edge of town, where the beets are turned into crystallized sugar: the small packets served with diner coffee, four-pound bags for home bakers and entire rail cars destined for other factories, where it will be incorporated into the sweetened, processed foods that fill Americans’ grocery carts.

Inside the factory walls and at other storage sites around the Red River Valley, hundreds of seasonal workers weigh, tag, sample and pour the beets 24 hours per day for weeks, creating piles nearly three stories high and up to a quarter-mile long.

Light rain drifted onto workers’ hard hats under the bright lights of the American Crystal Sugar piling site in Alvarado, 19 miles north of the East Grand Forks factory. 

In the scale house, a one-room building at the site’s entrance, foreman José Contreras pulled a white rain suit over his work clothes. When he walked out of prison into the fall air two weeks prior, after finishing a six-year sentence, he knew exactly where to go to find good, hard work. 

“I got out on a Monday and was working on a Wednesday,” he said. “To me, it means a lot — the chance that they gave me to come back to society, get a job… some people don’t have that.”

Despite the rain and mud, he was grateful to be outside, among people he’d known for years, earning a paycheck he could give to his fiancée in return for supporting him during his incarceration.

He worked his first sugar beet harvest when he was freshly 18, joining his parents and grandparents in the long line of farmworkers who came before him. 

José Contreras, foreman at an American Crystal sugar beet piling station in Alvarado, Minnesota, changes into rain gear as a storm rolls in on the night shift Wednesday, Oct. 4, 2023. Photo by Nicole Neri/Minnesota Reformer.

The money Contreras takes home is more than he’s earned in a long time, made possible by the huge sums the industry pulls in thanks to America’s insatiable demand for sweets.

The average American consumes three times the recommended daily limit of added sugars. Research shows that high sugar intake is correlated with increased risk factors for cardiovascular disease and diabetes, two of the leading causes of death in the U.S.

Sugar beets are an $11 billion industry supported by a protectionist federal program that raises the price of American sugar well above world levels by strictly limiting imports. The policy enriches the few thousand farmers who grow the crop, while also pushing food processors to use alternative sweeteners like high-fructose corn syrup or move operations to countries with cheaper sugar.

Moorhead-based American Crystal Sugar is the largest beet sugar producer in the U.S. Its 2,800 member farmers produce about 20% of the country’s sugar: more than 2 million tons per year.

The Red River Valley, which runs the length of the border between Minnesota and North Dakota, produces more sugar beets than any other region in the country. Around 44% of all U.S. sugar beets are grown here. Another 13% come from southern Minnesota; the rest come from Michigan and western states like Idaho and Wyoming.

An American Crystal sugar beet processing plant runs during the beet harvest Wednesday, Oct. 4, 2023. Photo by Nicole Neri/Minnesota Reformer.

‘We own the entire industry’

Outside of Ada, Minnesota, a long metal arm stretched out from a slow-moving harvester and poured beets into the back of a cargo truck as the vehicles drove side-by-side through the field. 

In the cab of the truck, farmer Neil Rockstad watched the harvester operator intently through the cracked window, pulling forward or drifting back based on the operator’s hand signals to evenly spread the beets in the truck bed.

Sugar beets are related to garden beets, though without much use as a raw vegetable. Instead, a sugar beet packs as much sugar into its cells as possible, up to 18% of its total weight. Because sugar beets are hardy and destined for processing, they don’t need to be hand-picked like leafy greens and berries; instead, much of the heavy lifting is done with machinery.

Rockstad usually operates the harvester himself, but he was short a truck driver. That afternoon, he took the vacant truck and handed over the harvester keys to his second-in-command, Kyle Kragnes, who also comes from a long line of sugar beet farmers.

On his farm, eight trucks — a combination of semis and smaller cargo vehicles — drive between the harvester and the closest piling site, an endless cycle of filling and emptying the truck beds. A button in the cab controls a hydraulic jack on one end of the truck bed, lifting it high to spill the beets out of the back and into the piler’s hopper. 

The piler separated the dirt from the beets and returned the dirt to Rockstad’s truck. As he reentered the field, he stopped, tilting the truck bed to return the dirt to the field, leaving behind a pile like a molehill.

For 12 hours — 2 p.m. to 2 a.m., in Rockstad’s case — he makes dozens of trips between the harvester and the piling site. He and other farmers have the option of running many trucks for these 12-hour shifts, or running half as many trucks 24 hours per day, in order to stagger deliveries to the piles without forming long lines. 

Rockstad doesn’t like to talk about how many acres he’s harvesting.

“That would be like telling you my salary,” he said.

Sugar beet farmers take home on average 54% more per acre than non-sugar farmers, and net income on farms that grow sugar beets is 7.2 times higher than the average non-sugar farm, according to the a recent U.S. Government Accountability Office report.

A harvester operated by Kyle Kragnes deposits beets into the back of a truck at Neil Rockstad’s farm near Ada, Minnesota on Oct. 10, 2023. Photo by Madison McVan/Minnesota Reformer.

Two factors bolster this prosperity: The first is shrewd organization.

There’s not a corporate middleman taking a slice out of sugar beet profits.

In the livestock industry, by contrast, large corporations control the majority of the market. Companies like Tyson, JBS, Cargill and Hormel have been accused of using their market share to lowball farmers on livestock and upcharge consumers to maximize profits. 

American Crystal Sugar and other producer-owned cooperatives — like Southern Minnesota Beet Sugar Cooperative in Renville and Minn-Dak Farmers Cooperative in Wahpeton, N.D. — use the income from the sugar to pay employees, maintain and upgrade their facilities and cover other operating costs. 

Once all of the production expenses are paid, the rest is divided up among the farmers according to their contribution to the harvest.

“As cooperative members, we own the entire industry,” Rockstad said. “As an individual farmer, I own and operate the land that I raise the beets on. As a cooperative shareholder, I own a portion of the piling site… I own a portion of the factory, I own a portion of the entire business and I own the sugar from the time I plant the seed in the ground until somebody purchases it off of store shelves.”

Sugar beet farmers’ history of public policy victories is the other factor turbocharging sugar profits.

The co-ops’ success is reliant on a federal sugar program that props up domestic sugar prices by limiting the supply of sugar each year.

American sugar prices are higher than world sugar prices because other countries subsidize sugar production and the U.S. strictly limits imports of cheap foreign sugar. Prices have sharply risen in recent years due to weather-related low supply and increasing worldwide demand.

Sugar producers boast that the program does not use traditional farm subsidies.

“U.S. sugar policy has operated at zero cost to taxpayers 19 of the past 20 years and is expected to do so again this year,” Rockstad told members of the U.S. Senate Agriculture Committee during testimony earlier this year. (The one exception, he explained, came in 2015 when Mexico exported subsidized sugar to the U.S. in violation of trade agreements.)

For the two biggest cash crops in the U.S., corn and soybeans, the federal government guarantees a minimum price for each bushel and pays farmers if the market price drops too low. Farmers also purchase crop insurance to ensure they recoup their input costs if weather conditions prevent them from harvesting.

The subsidies — along with advances in genetic modification and farm technology — lead to massive production and cheap corn and soy products like high-fructose corn syrup, soybean oil and livestock feed.

Sugar is different — controlled by supply-side limits that raise sugar prices without direct subsidies. 

Even though Rockstad’s Senate testimony was technically accurate, consumers pay the price. The U.S. Government Accountability Office found that the U.S. sugar program results in an “estimated overall economic loss to the U.S. economy of $780 million to $1.6 billion per year.”

“Higher sugar prices created by the program cost consumers more than producers benefit,” the report states.

Unlike publicly traded companies, American Crystal Sugar doesn’t have to file shareholder reports with the Securities and Exchange Commission or disclose its revenue and expense information like nonprofits. 

That makes it hard to get a clear financial picture of the industry.

Sugar beets grow on a farm in Oslo, Minnesota Wednesday, Oct. 4, 2023. Photo by Nicole Neri/Minnesota Reformer.

The U.S. sugar program raised farm income by about $100,000 to $190,000 per farm in 2022, with the benefits varying based on the size of the farm, the Government Accountability Office calculated.

The sugar market, like those of other agricultural commodities, is anything but free, resembling instead the kind of planned economy that Republicans often rail against.

The U.S. Department of Agriculture projects the total sugar consumption in the U.S., then allocates sugar production accordingly. Fifteen percent of the total is reserved for trade partners; the highest amounts come from the Dominican Republic, the Philippines, Brazil and Australia.

The remainder is split between the two sugar-producing crops: sugar beets and sugar cane. Sugar beets get 54% and sugar cane, 46%. Then, the USDA provides a “marketing allotment” — in other words, a quota — to all of the major sugar producers based on their processing capacity and geographic footprint.

This year, American Crystal Sugar got 2,132,371 tons. Minn-Dak Farmers Cooperative got 402,650 and Southern Minnesota Beet Sugar got 782,517.

But those aren’t strict limits on production, said Harrison Weber, president of the Red River Valley Sugarbeet Growers Association, a group that lobbies on behalf of sugar beet producers. 

“The federal government says how much we can sell but they don’t limit how much we can produce,” Weber said. 

Instead, the processing capacity of the sugar beet factories is the limiting factor for production, Weber said.

These public policy victories cost money. 

The company regularly donates to politicians and political action committees across the ideological spectrum. Since 2008, the company has spent $22.4 million on campaign contributions, split about 60/40 between Democrats and Republicans.

In the 2022 election cycle alone, American Crystal Sugar sent $3.3 million to politicians across the ideological spectrum.

The largest single contribution in the most recent cycle — $250,000 — went to a group backing North Dakota U.S. Sen. John Hoeven, who now sits on the Senate Agriculture Committee. 

The vast majority of other contributions in the 2022 cycle were between $2,500 and $10,000 to eight senators and 156 members of the U.S. House; recipients included Minnesota U.S. Reps. Michelle Fishbach and Brad Finstad, both Republicans.

With a new farm bill on the way — the most recent one expired in September — the company has already spent north of $3 million this year on lobbying Congress, the U.S. Department of Agriculture, the Office of the U.S. Trade Representative and the Environmental Protection Agency, according to lobbying reports.

On a national level, sugar beet farmers want better crop insurance options and to maintain the current level of sugar imports, Rockstad said. 

Weber frequently lobbies lawmakers at the Minnesota Capitol on behalf of sugar beet farmers in the Red River Valley. The sugar program is a federal issue, he said, so he works more on issues like fertilizer application and transportation, but he couldn’t recall any Minnesota legislation majorly impacting the sugar beet industry in recent years. 

American Crystal Sugar declined to respond to questions or to make its lobbyists available for an interview with the Reformer.

Sugar beets are gathered together at a piling station in Alvarado, Minnesota Wednesday, Oct. 4, 2023. Photo by Nicole Neri/Minnesota Reformer.

Building the pile

The piler, a machine that transfers beets from trucks to the pile, rumbled as it moved muddy beets to the top of the mound on its conveyor belt, stretching like an industrial brontosaurus over the growing hill at the far end of the site; in a matter of days, the pile would multiply in length several times over, fed by the endless stream of trucks, until it covered the full expanse of the dirt clearing. 

Dozens of piles like this dot the Red River Valley. The five American Crystal Sugar factories can only take in so many beets at a time, so the vegetables wait in these small mountains until the factory has capacity to process them. 

Building a beet pile is a feat of engineering. 

Even after their leafy tops are cut off and their roots severed by the harvester in the field, the beets are alive and respiring, taking in carbon dioxide and releasing oxygen, straining to regrow their leaves. The warmer the beet, the faster the respiration, and the more it degrades, said Mohamed Khan, sugar beet expert at North Dakota State University.

“When it’s respiring, it’s burning sugar,” Khan said. “You do not want that to happen.”

Warm temperatures quickly spoil the sugar beets, turning the solid, dense vegetables to stinky mush. It’s like the saying, “One bad apple spoils the whole bunch,” Khan said.

The best way to preserve sugar beets is to keep them cold, ideally below 52 degrees Fahrenheit. Starting in August, farmers harvest small amounts of beets — just enough to keep the factory running, but not so many that the beets are sitting around in the sun.

Thousands of sugar beets sit at a piling station near Oslo, Minnesota Thursday, Oct. 5, 2023. Photo by Nicole Neri/Minnesota Reformer.

The average air temperature in the Midwest has increased by 1.5 degrees Fahrenheit over the past century and will continue to get warmer. 

On Oct. 1, the day the harvest was supposed to begin in earnest, the temperature in East Grand Forks reached 92 degrees — two degrees shy of the area’s October heat record. Pulling the beets from the cool dirt and piling them would quickly destroy millions of dollars of product. 

So farmers waited. By Oct. 3, temperatures had significantly cooled. That’s when the rain began, turning the fields to mud pits that clogged combines and sucked in truck tires. Finally, conditions turned for the better by Oct. 5, and farmers across the region took to the fields in massive numbers, beginning the nonstop flow of beets from field to pile and factory.

With the right winter weather conditions and a tarp, piles will last months after harvest without spoiling. But the factories can’t process all of the beets in the winter; some piles need to last until the spring and early summer. Those are “deep frozen” — built with large pipes evenly spaced throughout, which distribute cold air throughout the pile to fully freeze all the sugar beets.

The pile-building process is a dance between the piler operator, who controls the flow and placement of the beets, and the loader operators, who place the pipes a set distance apart. Timing mistakes mean the tumbling beets can displace the pipes; when the pipes are incorrectly spaced, hot spots can form in the pile, ruining swaths of valuable sugar beets.

Pipes used to keep piles of beets cool sit on a piling station in Alvarado, Minnesota Wednesday, Oct. 4, 2023. Photo by Nicole Neri/Minnesota Reformer,

Minnesota’s own Nomadland

As a foreman, 75-year-old Jhon Ward is responsible for choreographing the dance of the piler and loaders as they work in sync through the night.

Jhon is a soft-spoken retired Navy officer and a self-described jack of all trades — a handyman, carpenter and plumber. His wife, Colleen Ward, works in the lab at the East Grand Forks factory and is the social glue of the campground where they live during the harvest, introducing herself to other campers and organizing social events.

Colleen was a hospital X-ray technician when the 2008 financial crisis hit, which cut her pay and opportunities. At one of the couple’s regular visits to the Dollywood theme park in Pigeon Forge, Tennessee, she spotted an ad for the park’s workamper program.

“I jokingly said to my husband, ‘Honey, why don’t we buy an RV and go work at Dollywood,’” Colleen said. “He took me seriously, and since then, for almost 13 years, we’ve been going everywhere, doing many different things.”

A campsite in East Grand Forks, Minnesota, where many workers stay during the beet harvest, is shown Thursday, Oct. 5, 2023. Photo by Nicole Neri/Minnesota Reformer.

They’ve worked for hotels, historic walking tours, Christmas tree farms, Amazon and many state parks and campgrounds. The past 10 years, they’ve also worked the beet harvest. 

They have an off-grid house in the mountains of North Carolina but prefer to be on the road. Their 13 grandchildren and five great-grandchildren are spread out across the country and their mobile lifestyle allows them to frequently visit family. 

They do not plan on slowing down.

For decades, generations of Mexican-American farm workers have traveled to the Red River Valley each summer and fall. Now, retirees like the Wards who live in RVs and take seasonal jobs also make up a significant portion of the workforce that American Crystal Sugar relies on — Minnesota’s own “Nomadland.”

Around half of the 1,400 temporary employees hired by Express Employment Professionals to work for American Crystal Sugar this year lived at campgrounds during the harvest, according to Alyssa Kaste, owner of Express Employment Professionals in Grand Forks. The worker-campers are known as “workampers.” 

Express Employment Professionals markets the beet harvest as an “unBEETable experience” on social media, drawing in workers with relatively high pay. The company offers a minimum wage of $17.70 per hour, plus overtime pay for the last four hours of each 12-hour shift and all day on Saturdays, double pay on Sundays and completion bonuses. When weather forces piling sites to close, workers get four hours of “stay pay.” 

The work can involve operating heavy machinery, shoveling beets and withstanding the elements.

Shifts are 12 hours long, every day for as long as the harvest lasts — anywhere from 10 days to over a month, depending on weather delays.

“It’s not for everybody,” Kaste said.

Around 60% of the workforce, however, comes back each year. 

Terri Malloy isn’t sure she’ll be one of them. 

Malloy and her greyhounds have been on the road for nine-and-a-half years, and Malloy figures it’s almost time for her to settle down — at least for a while.

Handmade textiles, paintings and ceramics fill her RV; she’s spent prior summers teaching craft and art classes. Her greyhound Gypsy splays out on a dog bed in front of the RV’s electric fireplace.

Terri Malloy, 57, talks about the beet harvest in her camper in East Grand Forks, Minnesota Thursday, Oct. 5, 2023. Photo by Nicole Neri/Minnesota Reformer.

This year was her first sugar beet harvest, and she worked in the sampling lab at the American Crystal Sugar factory, where she used automated equipment to weigh, count and read the sugar content of samples brought in from the piles.

She’s had two hip replacements and her gallbladder out, all while she was living in the RV. Finding health care and affordable insurance is a challenge, she said. When she’s in the Southwest, purchasing medicine in Mexico is cheaper and allows her to bypass regular bloodwork. 

Malloy’s gotten more and more nervous on the road — she’s had a couple near-misses, and since she travels alone, she doesn’t have anyone to help out or watch Gypsy in case of an emergency.

“It’s been an adventure,” Malloy said. “I love traveling, and I still get an itch every five or six months.”

She’s now at a horse ranch in Arizona, and if she likes it, she’ll stay off the road for a while. 

About a dozen sugar beet workers interviewed by the Reformer described many of the same themes. The jobs are easy but they take a toll on the body. The hours are long but the paychecks are worth it. The people — the end-of-harvest potlucks, the campground friends, the extended family, the kind coworkers — are what keep the workers coming back each year, as much as the pay.

Maria Garcia can remember the beet harvest before the workampers arrived. When Garcia first started here 27 years ago, she began with a shovel, lifting loose beets back onto the pile, cleaning up the work area and filling bags with beets for sampling in the lab. Then she learned to operate heavy machinery, and for 15 or 16 years — she can’t remember exactly — she ran the loaders and the piler, the biggest machine of all.

Maria Garcia organizes data in the scale house of an American Crystal sugar beet piling station in Alvarado, Minnesota, on Wednesday, Oct. 4, 2023. Photo by Nicole Neri/Minnesota Reformer.

Her children are now old enough to operate the machines, and she prefers to work in the scale house, where she can sit in a chair, and where other workers come to warm their hands or eat their meals during the grueling 12-hour shifts.

“Now, with my pains and everything, it’s better for me to stay in here,” she said in Spanish. Despite the elements, she misses working outside — the time passes faster. 

Across the room, Vanessa Lara took a slip of paper from an incoming driver and scanned it, loading the vehicle weight and information into the computer. She handed the slip back through the window and directed the driver to one of the two pilers at the far end of the site.

Vanessa Lara checks in drivers in the scale house of an American Crystal sugar beet piling station in Alvarado, Minnesota, on Wednesday, Oct. 4, 2023. Photo by Nicole Neri/Minnesota Reformer.

Her parents, aunts, siblings and cousins have all worked the harvest. She’s known Garcia for most of her life. 

The community of beet harvest workers is like a family, Lara said, even if it’s the money that keeps them coming back each year. 

“We’re migrants,” Lara said. 

Both women’s families live in Texas in the winter and spring, then travel to the Red River Valley in the summer and fall for the potato and sugar beet harvest. 

It’s the way their families have lived for generations.

Sugar beets grow on a farm in Oslo, Minnesota Wednesday, Oct. 4, 2023. Photo by Nicole Neri/Minnesota Reformer.

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Madison McVan
Madison McVan

Madison McVan is a Report for America corps member who covers economic mobility for Minnesota Reformer. She previously covered agriculture for Investigate Midwest after graduating from the University of Missouri in 2020 with degrees in Journalism and Latin American studies.