BRAWLEY, Calif. — The last sugarbeet processing plant in California is slated to close, possibly ending a 155-year-old industry in the state.
Southern Minnesota Beet Sugar Cooperative announced on April 22 that it will close its plant in Brawley, California, which has operated under its subsidiary, Spreckels Sugar Company Inc. A statement from the company said operations are scheduled to begin the decommissioning and closure process at the nearly 100-year-old facility in late July 2025 as the current processing season winds down. Certain functions, including warehousing and shipping, will continue to operate until all products have left the facilities, likely in late 2025 or early 2026.
“This was a difficult decision brought about by factors largely out of our control. Despite our extensive investments in the facility, the economic challenges facing the sugar industry have been building for several years as the costs of operating the Spreckels facility have continued to escalate. As a result, we made the difficult decision to close the Brawley factory and carefully focus our resources on the Renville, Minnesota factory given its strong performance and updated technologies,” said Paul Fry, president and chief executive officer of SMBSC, in a statement.
SMBSC said it has invested close to $100 million in improvements and repairs at the Brawley facility in the past 10 years, while also increasing compensation to employees more than 66%. But the facility continues to lose money, SMBSC said, adding that it would require another $100 million or more to make the facility financially viable.
"During this transition, our focus remains on supporting the workers at the Brawley factory and the community," Fry said.
The closure could be devastating to farmers and have a ripple effect on the community.
California sugar
According to the University of California Davis website, California's sugarbeet industry began in 1870, with the first commercially successful U.S. plant opening in the state in 1879. The last northern California sugarbeet factory closed in 2008, leaving only the Brawley plant in the state's Imperial Valley, in far southeastern California.
In its statement, SMBSC said it has been discussing "the long-term financial and operational challenges" facing the Brawley facility for years with the California Beet Growers Association.
“We appreciate the California Beet Growers Association working with us over the years and are proud of this facility and the workers who have operated it," Fry said.
CBGA executive director Shelby Trimm was out of the office on Thursday and not immediately available to return calls seeking information. However, she told Imperial Valley Weekly earlier in the week that the closure would be devastating to the agriculture economy of the area. Trimm also is the executive director of the Imperial Valley Vegetable Growers Association. CBGA growers grew 28,000 acres of sugarbeets this growing season.
Stephen Kaffka, emeritus professor of Cooperative Extension and specialist in the Department of Plant Sciences at UC Davis, said the summer heat in the desert of the Imperial Valley means it's a great place for winter production, where certain crops can thrive in the coolest part of the year, Kaffka explained. The valley is very important to U.S. food production of vegetables. However, not all soils there are of sufficient quality for vegetable growth. Sugarbeets, though, have thrived there for decades, with the climate providing efficient high production.
"Beets have been a mainstay in the Imperial Valley for quite a long time," he said.
Farmers would plant sugarbeets in the fall, then harvest in the spring. The harsh summer heat there means harvest often begins in April, which Kaffka said is really too early for economic yields. Harvest could stretch as long as about the middle of June to allow for far greater yields, but early heat could devastate the crop.
Farmers who have grown sugarbeets there have few other options for the acres they would have planted to sugarbeets this fall, Kaffka said. Hay crops, like alfalfa or sudangrass, are common rotations, but the market is already saturated for those. Other options include wheat and durum, and Kaffka said a small amount of canola also is grown there.
"There's not really a clear alternative," he said.
Besides the concerns about what else can grow there, Kaffka said the capital intensive nature of sugarbeet farming means growers now have equipment that isn't used in any other agriculture in the area. For instance, he said if a grower recently bought a new harvester, he could be "in bad shape" now.
"The grower community is pretty upset," he said.
He believes grower groups are still trying to find ways to keep the sugarbeet industry in California going, but that would be difficult, too. Sugarbeets could be used for ethanol, but that would require a new processing facility.
And Kaffka said there will be a ripple effect in the community. California, he explained, is a split society of very rich and very impoverished. The interior of the state has the highest poverty rates. That has made the sugar industry in the Imperial Valley "still very critically important in many ways" despite its relatively small size. The loss of the industry will impact factory workers as well as all the other players, like truck drivers and other support industries.
"It's a big loss," he said.
There may be a loss to the sugar industry as a whole. Kaffka said keeping the U.S. sugar program in the farm is "always a fight, always has been." California's senators have traditionally been supporters of the sugar program.
"I can't see any reason they would have to do that anymore," he said.
Economic issues
In its release about the closure, SMBSC said it made its decision "after a thorough evaluation of the long-term financial and operational challenges facing the facility as well as an assessment of the economic challenges and uncertainty facing the sugar industry that have been building for several years."
The company noted "various external factors" hampering the sugar industry, including uncertainty in the macroeconomic environment, declines in sugar and co-product prices and the impact of inflation. The company also noted pressure on the sugar industry from increased volumes of "tier-2 imports" — imports that come in outside of the sugar program's tariff rate quota system and are subject to tariffs — and out-of-date loan rates for refined beet sugar in the U.S. sugar program.
"The result is that the Spreckels facility has suffered cumulative losses over more than a decade. Taken as a whole, it was determined these factors make the future of the Brawley facility not financially viable," the company's statement said.
SMBSC said it "will instead focus its resources on the Renville, Minnesota, factory considering its strong performance, modern technologies, industry-leading production capacity, and logistical advantages."
The Brawley factory is far from the only sugarbeet or sugarcane facility to close in the past 25 years. Tim Deal, a Minnesota farmer and vice president of the American Sugarbeet Growers Association, noted in Congressional testimony about the ag economy on Feb. 5 that 28 facilities had closed since 2000, leaving 43 remaining plants processing sugarbeets or sugarcane. That makes the Brawley plant the 29th closure, leaving 42 plants, 19 of which process sugarbeets.
American Crystal Sugar in 2023 announced it would no longer contract with Montana-Dakota Beet Growers Association members who raised the crop for Sidney Sugars Inc. and then closed its factory in Sidney, Montana. American Crystal had noted lagging interest in growing sugarbeets in the area of eastern Montana and western North Dakota that supplied the factory, while growers there said decreases in acreage had come due to reductions in payments contracted by the company.
Kaffka said the sugarbeet industry is financially difficult. While SMBSC had put substantial money into the Brawley factory, he said some people believed it wasn't enough to make it efficient and profitable. He said growers in the Imperial Valley had floated the idea of buying the Brawley factory from SMBSC. But he said SMBSC could see their Minnesota facility as a better financial investment, along with keeping the piece of the sugar program quota from the Imperial Valley and moving it to Minnesota.
"Their self interest clearly conflicts with the interest of the people here," Kaffka said.