Wednesday, January 13, 2016

Sugar beet processing may return to Ontario

Ontario might become home to a new $100-million sugar beet processing plant, according to Mark Lumley, president of the Ontario Sugar Beet Growers’ Association.

He envisions expansion from 10,000 acres now to 30,000, most of it near the proposal to build in Lambton County near Sarnia.

Lumley has worked with the Michigan Sugar Cooperative to persuade Ontario farmers to resume growing the crop and marketing it to the cooperative’s plants in Michigan.

He talks about forming an alliance, or contract, with the Michigan Sugar Cooperative to build the plant in Ontario.

The Michigan cooperative recently announced an ambitious plan to expand processing capacity at its three plants.

Ontario once had a thriving sugar beet industry, including processing plants in many communities in Southwestern Ontario.

The biggest were in the Chatham area, but there was even one in Kitchener when it was still called Berlin.

The Ontario industry went into spectacular bankruptcy in the mid-1960s and was a political hot potato as growers sought compensation for their losses.

Ontario was home to Redpath, a sugar refining company with major facilities on the Toronto waterfront. It consistently turned a profit, mainly by importing cheap sugar from the Caribbean to refine for Canadian customers.

The United States maintained relatively high sugar prices by holding a high tariff against imports;sugar was much more expensive in the U.S. than Canada.

Today the U.S. farm bill continues to coddle the sugar industry price support through preferential loan agreements, domestic market controls and tariff-rate quotas.

That high price also resulted in keen competition, including the development of a high-fructose corn syrup sweetener industry and a huge market for Canadian cookies, most of them baked in Kitchener and Cambridge.

What remains to be seen is whether the U.S. can maintain a relatively high price for sugar – and therefore a strong demand for sugar beets at the Michigan Sugar Cooperative – or if free trade with low-cost suppliers such as Cuba will reduce U.S. sugar prices.