VERS C A L I F O R N :■, \WJ CALIFORNIA AGRICULTURAL Experiment Station Extension Service CIRCULAR 562 CAECAG562 1-16 (1973) Sugar beets, a major field crop in California, are grown on more than 300,000 acres. This circular briefly describes federal legislation which regulates sugar production in the U. S., and examines production trends in California. Grower-processor relations, costs of production, returns to growers, and factors important in the production of the crop are also discussed. LOCATION OF FACTORIES and SUGAR BEET ACREAGE in CALIFORNIA Numbers indicate the average number of acres (to the nearest 1,000) har vested in that county during the 5- year period 1965-1969. Factory location March, 1973 THE AUTHORS: F. J. Hills is Extension Agronomist, Department of Agronomy and Range Science, University of California, Davis. S. S. Johnson is Agricultural Economist, Farm Production Economics Division, Economic Research Service, U.S.D.A., stationed at University of California, Davis. THE SUGAR BEET INDUSTRY IN CALIFORNIA Introduction : U. S. Sugar Legislation The Sugar Act P er cent * s to De supplied by some 30 ~ . , , . r . foreign countries. Production and marketing oi sugar in rp, , . . . j , tto . i iii t^i i l ne basic apportionment among do- the U. o. is regulated by the federal .. j • x n u o a , in ; n ii. T^m mestic producers is as iollows, when quo- bugar Act oi 1948, as amended in 1971. . ..in nn nnn u ** i rril & ' ._. tas total 11,200,000 short tons, raw value: the Act has three purposes: (1) to as- sure American consumers adequate sup- Short tons, plies of sugar at reasonable prices; (2) to Area raw value maintain and protect the welfare of the Domestic beet sugar 3,406,000 domestic sugar industry; and (3) to pro- Mainland cane sugar 1,539,000 mote the export trade of the United States. Hawaii 1,110,000 The Sugar Act directs the Secretary Puerto Rico 885,000 of Agriculture to determine, for each cal- Total 6,910,000 endar year, the amount of sugar needed to meet the requirements of consumers in Control and management of the the continental United States and to at- tain a specified price objective. This de- domestic sugar supply termination is to be made in October Procedures are specified in the Act to preceding the calendar year, and at such control domestic supply after the deter- other times during the year as may be mination of the area quotas. These steps required to attain the price objective. are: The price objective refers to a price T i i . i o f , . , 1 1 A l • / • In each domestic area, the Secretary lor raw sugar which would take into ac- . ,. , , . , . ; L - . r t , can establish domestic marketing ai- count the ratio oi such price and an aver- , , m ° i c . . . i f • -it lotments when necessary. Ihese al- age ox the parity index oi prices paid by , / ,, x j / i i • • j rpi lotments serve to assign or allot larmers and wholesale price index, lhe . r , r i i . , . „ a specific share ol the domestic consumption estimate thus is set annually f . , r .1 i f it -ii v \ marketing quota to the various pro- at a hgure that, hopelully, will adiust i i . .-». , i r j j • i cessors, thus placing a ceiling on the supply ol sugar to demand in such a way r r °, . , D . i . i. -i amount ol sugar which a company as to bring sugar prices in line with « o i « r . , . .1 x , r i ,.- can sell, buch allotments lor main- changes in the cost oi iarm production , , , , t , * ri-- land cane and beet sugar were in and the cost of living. ~ & rk .u > j .• effect as of 1971. Unce the next year s domestic consump- tion has been determined, the total * Shares of the area marketing quota amount of sugar it represents is allocated can be assigned to producers as acre- to both domestic and foreign sources of a g e allotments. These allotments are supply according to a predetermined for- known as "proportionate shares," mula. Under the 1971 amendment, 62 but they have not been imposed per cent of domestic consumption is as- since 1966. signed to the several segments of the State and county Agricultural Stabli- domestic industry, and the remaining 38 zation and Conservation Service offices [3] (ASCS) are responsible for the adminis- tration of farm proportionate shares when in effect, as well as for conditional pay- ment parts of the program. When pro- portionate shares are not in effect, the quantity of beets grown is determined by individual contracts between farmer and processor. Enforcing the program The tax-and-payment system helps en- force the various regulations imposed on the growers under the Act. An excise tax of 53 cents per 100 pounds of refined sugar is collected on all sugar marketed in the U. S. In 1969, sugar beet farmers received $90 million out of $109 million in collected excise tax. To qualify for a "conditional" payment (a portion of such excise tax collected) a grower must: re- main within his proportionate share allot- ment if imposed; produce evidence that the minimum wage established by the Secretary of Agriculture was met in pro- ducing his sugar beet crop; and, finally, not employ children under 14 years of age- Conditional payments are based on the "commercially recoverable" sugar pro- duced by the growers — that is, the quantity of sugar that can be recovered in processing. A sliding scale of payments exists which reduces payment to larger farms. For the first 350 tons of raw sugar produced, the base payment rate is 80 cents per hundredweight. After this the rate decreases, reaching a low of 30 cents for sugar in excess of 30,000 tons. Provisions are also made to reduce risk to growers due to weather, insects, and crop diseases. When the farmer suffers from these natural causes so that his acreage has to be abandoned, or so that his production becomes seriously de- ficient, he may then qualify for certain payments under the Act. SUGAR PRODUCTION TRENDS IN CALIFORNIA Sugar beets are grown in 31 California counties from Tehama in the north, not far from the Oregon border, south to Im- perial on the Mexican border. In the 5- year period of 1965-69, 38 per cent of the acreage was grown in the north central valley, from Stanislaus County north; 27 per cent in the south central valley, Mer- ced County south to Kern; 24 per cent in the irrigated desert area of southern California, primarily Imperial County; and 11 per cent in the coastal counties. Compared to the 1955-59 5-year period, acreage increased by 12 per cent in the south Central Valley region and by 2 per cent in the southern desert, while decreas- ing by 6 per cent in the north central valley and by 8 per cent in the coastal region. With the removal of planting restric- tions in 1962 and an increase in the price of sugar beets, acreage expanded sharply to a high of 350,000 acres in 1964. In 1964, 67 per cent more acres were har- vested than in 1960, but during this same period daily slicing capacity of factories increased only about 11 per cent. Sugar beets from the expanded acreage have been processed to some extent by larger capacity, but mostly by extending the period over which beets are harvested. The principal technique for increasing the length of factory run has been the de- velopment of the practice of overwinter- ing spring and early summer planted crops for harvest the following spring. This practice is now used extensively in certain areas of the north and south cen- tral valleys. As an example of how over- wintering has increased factory run, one plant averaged 130 days of operation per crop year before beets were overwintered. 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