ECONOMIC FACTORS AFFECTING THE SUGAR BEET INDUSTRY J. M. TINLEY Photos courtesy Caterpillar Tractor Company California now leads all other states in beet sugar production, but the U. S. sugar supply remains dependent on the world market and world conditions. With their big stake in the nation's and the world's sugar economy — with their own economic problems of crop com- petition and labor supply — can California's sugar beet growers look to continued high production and high returns in the years ahead? This circular analyzes and brings together the main world conditions, and the main local conditions, that are now critically shaping the future of Cali- fornia's sugar beet industry. The evidence shows that: • U. S. agriculture — and the sugar beet industry — are in strong financial shape, can meet any demands of the na- tional situation in the next few years. World sugar supplies are at an all-time high. • State and national sugar beet acreage will expand in 1952. Labor and other shortages will limit expansion. Longer predictions are risky due to world conditions. • Excessive diversion of sugar beet acreage to other crops — if it happens — will curtail processing facilities and work to the grower's disadvantage in the long run. THE AUTHOR: J. M. Tinley is Professor of Agricultural Economics, Economist in the Experiment Station, and Agricultural Economist on the Giannini Founda- tion, Berkeley. ECONOMIC FACTORS AFFECTING THE SUGAR BEET INDUSTRY J. M. TINLEY Sugar beets are an important field crop in California. During the years 1945-49 some 135,000 acres of beets were har- vested annually in the state. Annual out- put of beets averaged 2,376,000 tons and annual farm value including government payments, about $32,000,000. Beet acreage planted and harvested an- nually in California and in other sugar beet-producing states fluctuates greatly from year to year. These fluctuations do not appear to be related directly to prices received by beet producers during pre- ceding years, nor to prospective beet prices per ton. Other factors, such as anticipated net returns per acre for com- peting crops, labor supply, rotation prac- tices, and weather conditions at time of planting appear to have an important bearing on acreages actually planted to beets each year. The continental United States pro- duces less than one third of all the sugar it consumes each year. The remainder is imported from its territories (Puerto Rico, the Virgin Islands, and Hawaii) and from Cuba and the Philippines. Fac- tors affecting world production and trade in sugar, therefore, will have to be con- sidered in assessing future prospects of the sugar beet industry in the United States. INTERNATIONAL SUGAR AGREEMENTS... have controlled sugar production and prices since the 1920s. New agreements are under way. Beet sugar is produced in most of the countries in the northern hemisphere having a temperate climate. Cane sugar, on the other hand, is produced in coun- tries having a tropical or semi-tropical climate. Beet sugar does not enter exten- sively into world trade. Most countries producing beet sugar utilize all or the bulk of their output within their own borders. Before World War II a few countries like Poland and Czechoslovakia had small surpluses which they exported to adjacent countries. Although nearly all the cane producing countries produce surpluses over domestic requirements, the world export trade in sugar is domi- nated by Cuba. Following World War I, world output of both cane and beet sugar increased rapidly. Wholesale prices of sugar in the world market declined sharply. During the latter half of the 1920s several na- tional and international cartels were es- tablished in an effort to stabilize sugar prices. Several important sugar exporting countries also entered into negotiations for the purpose of limiting further expan- sion of acreage of beets and cane. The outcome was the International Sugar Agreement of 1931, also known as the [3] Chadbourne Agreement.* This agree- ment had only limited success because during the worldwide depression which began in the fall of 1929, the pressure was for a further decline in sugar prices. Furthermore not all important sugar pro- ducing countries were parties to the agreement. The Chadbourne Agreement came to an end in August, 1935. Further negotia- tions among sugar producing countries culminated in the International Sugar Agreement of 1937, signed by twenty-one governments, including all the major im- porting as well as exporting countries. The United States was one of the co- signers. The main objectives of the agree- ment were to limit further expansion of acreage of both beet and cane, to establish import and export quotas, and to stabilize prices and international trade in sugar. The main features of the 1937 agreement, as they concerned the United States, were implemented by the Sugar Act of 1937. Under this Act all sugar for the United States market, whether domestic or im- ported, was limited by quota. Basic procedure was for the Secretary of Agri- culture to determine annually the quan- tity of sugar needed to meet consumption requirements in the continental United States. In making this determination the Secretary of Agriculture must ensure that prices to consumers would not be exces- sive and that the welfare of sugar beet and sugar cane producers in the United States would be protected. Definite per- centages of annual consumption require- ments were allocated to domestic cane and beet sugar producers, to the terri- torial possessions (Hawaii, Puerto Rico, the Virgin Islands), to the Philippines, and to Cuba, with only about 1 per cent of requirements allocated to other coun- tries. Limitations were also placed upon the percentage of sugar that could be im- ported in refined form. "Conditional payments" were to be made to beet and cane producers in the United States and the territories as a means of encouraging production. The International Sugar Agreement of 1937 was inoperative for several years during World War II when sugar sup- plies were greatly reduced. Although the 1937 agreement is nominally still in ef- fect, negotiations are now under way for a new agreement. In 1948 Congress passed a new Sugar Act which differed in several respects from that of 1937. The 1948 Act sub- stituted fixed quotas for the United States, its territories, and the Philippines, in place of percentage quotas. All but 1 per cent of the balance needed to meet domestic requirements was allotted to Cuba. Under the 1948 Act any deficit in supplies of sugar obtained from the Philippines (fixed quota less supplies) was to be allocated to Cuba. "Conditional payments" to domestic and territorial producers were continued. THE INTERNATIONAL POLITICAL SITUATION the question mark in the sugar outlook. Experience during World War I, and especially during World War II, indicates that a widespread international conflict can have far-reaching effects upon world * For a more detailed statement of the condi- tions leading to the Chadbourne Agreement see B. C. Swerling, International Control of Sugar, 1918^41. Stanford Univ. Press, Commodity Policy Studies No. 7, 69 p. 1949. production of sugar and on consumption in individual countries. In both world wars sugar was one of the first commodi- ties to be placed under price and ration- ing controls. International sources of supply of sugar were greatly restricted, necessitating drastic curtailment of con- sumption in importing countries. In World War II production of sugar [4] Table 1 . Sugar Production: World and Selected Countries (1000 tons). Region or country Average 1935-39 1940 1941 1942 1943 1944 1945 19,657 6,575 World (Cane Sugar) World (Beet Sugar) 22,677 12,027 23,092 12,746 21,991 9,737 20,635 9,369 21,995 8,869 19,634 8,439 Total (Cane and Beet) 34,704 35,838 31,728 30,004 30,864 28,073 26,232 Italy (Beets) 416 257 1,202 1,447 1,127 669 325 901 1,898 1,148 503 268 1,214 1,474 617 426 220 1,148 748 250 329 204 984 550 150 61 100 550 125 75 26 70 175 125 115 Netherlands (Beets) Formosa (Cane) Java and Madura (Cane) Philippines (Cane) Source: "The World Sugar Situation," U.S. Dept. Agr., Bur. Agr. Econ., August 1946. declined greatly for a number of reasons. Shortages of labor and diversion of acre- age to other crops were important factors leading to reduction in output of sugar in the United States and a few countries in northwest Europe. In combat regions acreages under beets and cane were re- duced or crops could not be harvested or milled. Table 1 shows how drastically the output of sugar was reduced in some of those countries where there were wide- spread military operations. The loss was particularly drastic during the last three years of the war. At present writing the world is in a condition of armed peace. Actual warfare is raging in Korea. The world faces the danger of a widespread war. Although there is every reason to believe that the peoples of most countries ardently desire peace, the United States and the countries of western Europe have embarked upon an extensive program of rearmament as a means of self-protection. The diversion of physical and human resources from civilian to military pur- poses is bound to have a far-reaching effect upon the economies of the Americas and western Europe. Employment in the United States is rising. Labor shortages have shown up in certain areas of pro- duction. Wages have risen moderately and further rises are in prospect. Na- tional income, measured in dollars, has increased. In spite of higher taxes con- sumer income has expanded appreciably since 1949. At the same time the output of consumer goods has been curtailed and further curtailment is in prospect. Under these circumstances it is reason- able to expect that strong inflationary pressures will develop. Wholesale and re- tail prices have risen markedly since June, 1950, and may increase still fur- ther. Some price and allocation controls have been introduced by the federal gov- ernment, but up to now these appear to have been only partially effective. Fur- ther controls and higher taxes are in prospect. These developments have had, and will continue to have, an important impact upon all branches of agriculture in the United States, including the sugar beet industry. Although there appears to be no immediate danger of a serious curtail- ment of imports of sugar, growers may face shortages of labor during the next few years. Moreover, if the government undertakes a comprehensive program to direct agricultural production, as was done in World War II, there is a possi- [5] bility that some acreage may be diverted from beets to the production of other crops deemed more important in our na- tional effort. These intangibles arising out of the present unsettled world situation are superimposed upon the more normal or usual factors that influence decisions of producers of sugar beets and of sugar cane. Such intangibles make the outlook as to trends in acreage during the years immediately ahead more uncertain. AGRICULTURE'S FINANCIAL CONDITION... strong enough to meet a tightening national situation. The financial condition of agriculture will have an important bearing upon the ability of the sugar beet industry, as well as other branches of agriculture, to meet the adjustments that may be needed dur- ing the next few years. At the outbreak of World War II American agriculture had just passed through a prolonged period of depres- sion. A large number of farmers still car- ried a heavy burden of indebtedness. Needed capital improvements had been delayed. Purchase of agricultural imple- ments and machinery had been greatly curtailed. Much of the equipment on farms was in poor working condition. Farmers had few cash reserves. In spite of this and in spite of serious shortages in labor and equipment, American agri- culture succeeded in expanding agricul- tural output some 30 per cent during the war years. Ironically enough World War II her- alded in a period of unparalleled pros- perity in agriculture — prosperity which has continued up to the present. During the war years and the immediate postwar years prices of nearly all agricultural products rose more rapidly than costs. Net income realized by farmers rose from $4.5 billion in 1940 to $12.9 billion in 1945 and 17.8 billion in 1947. Although net income realized by farmers has de- clined somewhat since 1947, it was still $13.0 billion in 1950. In spite of an ap- preciable increase in farm real estate values (from $33.6 billion in 1940 to $50.3 billion in 1946), long-term farm mortgage indebtedness was reduced from $6.6 billion in 1940 to $4.7 billion in 1946. Farmers also greatly increased their cash reserves. During the postwar years, from 1945 onwards, farmers embarked upon exten- sive programs of capital improvement — levelling of land, drainage, fencing, ir- rigation, and new buildings. Farmers also greatly increased their holdings of agri- cultural implements and machinery. It is interesting to note that in 1950, power (animal and mechanical) was about 60 per cent greater than in 1940. The num- ber of tractors on farms had doubled during the ten-year period, the number of milking machines, combines, and corn harvesters had tripled. In 1950 farmers used more than twice as much fertilizer as they did in 1940. In the sugar beet industry great cultural and mechanical advancements have taken place. There is now widespread use of segmented or decorticated sugar beet seed. The number of mechanical beet harvesters has in- creased appreciably during recent years. These two developments have greatly re- duced the need of labor for planting, cul- tivating, and harvesting. It can be said that the agricultural in- dustry of the United States, including the sugar beet industry, is in excellent shape to meet any demands which the national situation may impose on it during the next few years. A note of caution is neces- sary. Production costs in the years ahead are likely to rise more rapidly than prices received and farmers should anticipate some decline in net income. [6] World Production. Because the In- ternational Sugar Agreement of 1937 imposes certain restrictions upon the out- put of both beet and cane sugars in the United States and its territories, and be- cause of large annual imports of sugar, it is necessary to consider trends in world production of sugar. Since 1910, world production of sugar has shown a distinct upward trend, interrupted by a moderate decline during World War I and a more pronounced decline during World War II (table 2, figure 1) . During World War II output of sugar declined from about 36,000,000 tons in 1940 to 26,000,000 tons in 1945. Since then, however, world production of sugar has increased stead- ily to reach a new all-time high of 41,000,000 tons in 1950. In spite of the low production during 1945, the average annual output of sugar during the years 1945-49 was 33,500,000 tons, as com- pared with an average yearly output dur- ing the 1910-14 period of 19,800,000. This represents an increase of 69 per cent. Cane sugar accounts for most of this increase. During the years 1945-49 world PRODUCTION OF SUGAR... reaches all-time high in 1950. production of cane sugar averaged 24,- 250,000 tons a year, an increase of nearly 122 per cent over the average for the 1910-14 period. In contrast, production of beet sugar during the 1945-49 period was 9,260,000 tons a year, an increase of only 4% per cent over the average annual output during the 1910-14 period. Since 1915, cane sugar has accounted for about two thirds or more of all sugar produced; during the 1945-49 period for 72Y2 per cent of world production. The year 1950 affords a good picture of the relative importance of the various continents and countries in the produc- tion of both cane and beet sugars (figure 2) . In that year the North American con- tinent (including the islands of the Carib- bean) accounted for 40 per cent of all centrifugal sugar produced (excluding low grade sugars), and the continent of Europe (excluding the U.S.S.R.) for 25 per cent. Next in importance were Asia, South America, Oceania, the U.S.S.R. and Africa. The great bulk of beet sugar was produced in Europe, the United States, and the U.S.S.R. Table 2. World Production of Cane and Beet Sugar (1910-14 to 1945-49). Cane and Beet Sugar Cane Sugar Beet Sugar Per cent of Total Per cent of Increase 1910-14=100 Cane Sugar Beet Sugar Cane and Beet Sugar Cane Sugar Beet Sugar 1910-14. . . (1000 tons) 55.2 44.8 100.0 100.0 100.0 19,798 10,932 8,866 1915-19.. 18,875 13,759 5,116 72.9 27.1 95.4 125.9 57.7 1920-24. . 22,384 15,922 6,402 71.1 28.9 113.1 145.6 72.2 1925-29. 29,419 19,937 9,482 67.8 32.2 148.6 182.4 106.9 1930-34. . 29,919 19,636 10,283 65.6 34.4 151.1 179.6 116.0 1935-39 . 34,704 22,677 12,027 65.3 34.7 175.3 207.4 135.7 1940-44. . 31,301 21,469 9,832 68.6 31.4 158.1 196.4 110.9 1945-49 . . 33,510 24,250 9,260 72.4 27.6 169.3 221.8 104.4 [7] 1910-14 1915-19 1920-24 1925-29 1930-34 1935-39 1940-44 1945-49 1910-14 1915-19 1920-24 1925-29 1930-34 1935-39 1940-44 1945-49 30 z g 20 CANE SUGAR 1910-14 1915-19 1920-24 1925-29 1930-34 1935-39 1940-44 1945-49 Fig. 1. World production of sugar, 1910-1950. [8] D BEET SUGAR | | CANE SUGAR Fig. 2. World production of centrifugal sugar by geographic regions, 1950. Cuba was the most important produc- ing country, accounting for 18 per cent of world production. Next in importance were the United States (7 per cent), the U.S.S.R. (6 1 /2 per cent), Germany (5 per cent), and India and Brazil (4% P er cent each). The countries from which the United States obtains the bulk of its supplies of sugar (United States, Cuba, Puerto Rico, the Virgin Islands, Hawaii, and the Philippines) together produced 34.3 per cent of world output in 1950. United States Supply Area. In the United States, particular interest centers on sugar production-trends of those countries from which it draws the bulk of its supplies. Trends in acreage of beets or cane planted or harvested, yields per acre, production of cane or beets, and production of raw sugar since 1930 are shown in table 3 and figures 3-8. Data for the Virgin Islands have not been in- cluded because of the minor importance of this source of supply. [9] Table 3. Production of Beets and Cane: United States' Supply Area (1930-1950). Five-Year Period United States (Beets) United States (Cane) Hawaii (Cane) Puerto Rico (Cane) Cuba (Cane) The Philippines (Cane) Average Area Harvested (1000 Acres) 1930-34 1935-39 1940-44 1945-49 801 827 745 761 207 266 269 299 139 132 121 101 277 321 1,638 1,710 1,962 2,640 640 595 261 262 Average Yield Per Acre (tons) 1930-34 1935-39 . 1940-44 1945-49 11.2 11.5 12.7 13.3 14.7 21.3 19.1 19.8 60.8 66.9 68.1 72.4 29.6 28.1 17.6 16.9 17.3 16.5 16.4 16.5 12.8 13.3 Average Total Production: Beets and Cane (1000 tons) 1930-34 1935-39 3940-44 1945-49 . 8,944 9,595 9,497 10,174 3,043 5,679 5,173 5,894 8,477 8,795 8,210 7,381 8,152 9,070 28,054 28,854 34,276 43,987 10,699 9,833 3,897 3,851 Average Production of Sugar (1000 tons) 1930-34 1935-39 1940-44 1945-49 1,396 1,518 1,451 1,512 236 474 429 455 1,025 982 911 833 960 1,075 3,331 3,128 3,532 5,457 1,177 1,127 438 423 United States: Sugar Beets. There has been a slight downward trend since 1930 in the acreage of sugar beets har- vested in the United States (table 3, fig- ure 3). Acreage harvested fluctuates consider- ably from time to time. Years of high acreage are followed by one or more years of relatively low acreage. In con- trast, yield of sugar beets per acre has increased steadily, averaging 11.2 tons during 1930-34, and 13.3 tons during 1945-49. The over-all production trend since 1930 has been upwards, despite rather violent fluctuations, and in 1950 reached a record high of 13,549,000 tons. United States: Sugar Cane. Acre- age of sugar cane harvested has in- creased steadily, though somewhat irregularly since 1930 (table 3, figure 4) . During the years 1945-49 about 299,000 acres of sugar cane were harvested an- nually, compared with an average of only 207,000 acres during 1930-34. Yield of sugar cane per acre increased rapidly between the two five-year periods, 1930- 34 and 1935-39. Since 1939 there has been no significant trend. Production of sugar cane has increased steadily though irregularly during the whole of the period under review. Output of sugar cane averaged 5,894,000 tons a year dur- [10] Fig. 3. Average yield per acre and production of sugar beets: United States. 400 300 ACRES HARVESTED Production of sugar cane Fig. 4. Average yield per acre and production of sugar cane: United States. 150 -. Acres harvested ... -^\ ^— -^ i ^" Vv-; tf> iu 100 / \ / v^ < ^ / v-' V \ / a \ / YIELD PER ACRE w 50 o X 1- Production of sugar cane Fig. 5. Average yield per acre and production of sugar cane: Hawaii. [ii] ing 1945-49, or nearly double the annual output during 1930-34. Hawaii, In the Hawaiian Islands acreage of sugar cane harvested has declined steadily since 1930 (table 3, figure 5). An average of 101,000 acres of cane were harvested annually during 1945-49, as compared with 139,000 acres during 1930-34. Hawaii has a very high yield of cane per acre — more than three times the yield in the United States. Yield per acre has risen steadily from 60.8 tons during 1930-34 to 72.4 tons during the 1945-49 period. In spite of the increase in yield per acre, and because of the over- all decline in acreage, the trend of pro- duction of cane has been downward since 1930, averaging 7,381,000 tons a year during 1945-49, a decline of about 13 per cent since 1930-34. Puerto Rico. Detailed information for Puerto Rico is available only since 1939 (table 3, figure 6) . Acreage in the area in sugar cane increased from 217,- 000 acres to 350,000 from 1939 to 1950, an increase of 61 per cent. Yield per acre in Puerto Rico averages about 10 tons higher than in the United States. Yield per acre declined sharply from about 35 tons in 1940 to 20 tons per acre in 1944. Since 1944 the trend has been upwards. The trend of sugar cane production since 1939 has been upwards, notwithstanding a severe decline during the years 1943 and 1944. Output of cane in 1950 amounted to 10,615,000 tons as compared with 6,859,000 tons in 1939. Cuba. Cuba has a larger acreage in cane than the United States, Hawaii, Puerto Rico, and the Philippines com- bined. After a sharp decline from 2,648,- 000 acres in 1930 to 1,138,000 acres in 1933, acreage in cane has increased more or less steadily since (table 3, figure 7). The area in cane averaged 2,640,000 acres yearly during 1945-49, as compared with 1,638,000 acres a year during 1930-34. Yield per acre has shown no very sig- nificant trend. If anything, it has been slightly downward since 1930. Produc- tion of cane, after a sharp decline be- tween 1930 and 1933, has since been distinctly though irregularly upwards. During the period 1945-49 output of cane averaged 43,987,000 tons a year, as compared with 28,054,000 tons during 1930-34. Cuba's increase in production of cane (and hence of sugar) is of particular significance, because Cuba is an impor- tant source of sugar for the United States. It is, moreover, easily accessible. The Philippines. Acreage in sugar cane in the Philippine Islands declined moderately from 1930 to 1940, and then fell precipitately during the war when the Philippines were under Japanese oc- cupation (table 3, figure 8). The area in cane averaged 640,000 acres a year during 1930-34, 595,000 acres during the next five-year period, but then de- clined to 261,000 acres a year during 1940-45. Less than 100,000 acres were harvested annually in 1944 and 1945. Since 1945, acreage planted to cane has increased steadily but in 1949 it was still only about half the 1930-35 average. There was no significant trend in yields per acre during the years 1930 to 1941. During the war the yields per acre de- clined from about 17.0 tons in 1940 to a nominal 10.0 tons. Since 1945, how- ever, yields per acre have risen steadily and in 1948 and 1949 averaged about 21.3 tons, the highest during the period under review. From 1930 to 1939, output of sugar cane averaged about 1,150,000 tons a year; from 1940 to 1949, about 430,000 tons a year. By 1950, however, output had reached 1,035,000 tons and was thus nearly up to prewar levels. All Areas Combined. These figures indicate that in spite of some decline in acreage in Hawaii and the sharp wartime decline in output in the Philippines, out- put of both beets and cane in the United States supply area was at an all-time high in 1950. And the trend of acreage in cane and beets has been upwards since 1945. [12] Acres harvested A S~~ / V--^ yr 300 Av 7 " /V v 7 200 / V YIELD PER ACRE _ 100 12 co i- Z 8 o j 6 2 4 2 PRODUCTION OF SUGAR CANE Fig. 6. Average yield per acre and production of sugar cane: Puerto Rico. Yield per acre Production of sugar cane O CM ♦ 10 GO O CJ K) IO ") Xi IT, * * o> o cj> c> o C0O«M*-»0 O0>C9>CI>ClkCAcl> Fig. 7. Average yield per acre and production of sugar cane: Cuba. Production of sugar cane Fig. 8. Average yield per acre and production of sugar cane: Philippines. [13] SUGAR CONSUMPTION IN THE UNITED STATES . . . is not yet up to prewar levels. Under the Sugar Acts of 1937 and 1948, the Secretary of Agriculture is re- quired to make determinations each year of the volume that will be required for domestic consumption at prices which are reasonable to consumers. Sugar to meet domestic consumption requirements comes from several sources — domestic production, stocks of sugar on hand at the beginning of each year, and imports of sugar from foreign countries (chiefly Cuba and the Philippines) and from the territories. During the past 15 years total stocks so available have fluctuated from 7.5 million tons (1946) to 10.3 million tons (1941), and have averaged about IMPORTS FROM TERRITORIES DOMESTIC PRODUCTION Per capita CONSUMPTION OF SUGAR: U.S.A. 100 90 80 70 lO lO 1937 1939 1941 1943 1945 1947 0» Fig. 9. Production, stocks, imports, exports, and per capita consumption of sugar in the United States: 1935-1949. [14] 8.8 million tons. The volume of sugar actually consumed each year consists of the total tonnage available annually less exports of sugar and less stocks of sugar at the end of each year (figure 9). The quantity of sugar actually avail- able for consumption each year during the past 15 years has fluctuated between 5.5 million tons (1942) and 8.1 million tons (1941) and has averaged about 6.7 million tons. The volume available for consumption has increased moderately since the prewar years — from 6.6 million tons annually during 1935-39 to 6.8 mil- lion tons during 1945-49. Per capita consumption of sugar in the United States averaged about 97 pounds per year during the period 1935-39, but declined rapidly during the war and im- mediate postwar years to about 74 pounds in 1945 and 1946. Since then per capita consumption of sugar has increased but by 1949 had not quite reached prewar levels. PRODUCTION OF SUGAR: BY STATES... figures show California leading producer. Beet sugar is normally produced in some sixteen states and cane sugar in two states. In 1949 the United States pro- duced about 1,501,000 tons of refined beet sugar, and 486,000 tons of refined cane sugar. Four-fifths of the cane sugar was produced in Louisiana and one-fifth in Florida (Table 4 and figure 10) . The bulk of the beet sugar, about 77.7 per cent of all beet sugar, was produced in 1949 in the Mountain and Pacific Coast regions; the balance, 22.3 per cent, in the North Central regions. California was the most important state producing 27.4 per cent of all beet sugar, followed by Colorado with 20.7 per cent. These two states thus produced nearly half of all the beet sugar of the United States. Acreages of sugar beets harvested an- nually fluctuate rather violently from time to time. For example, in 1942 some 1,048,000 acres of sugar beets were har- vested in the United States, as compared with 754,000 during 1941, and 617,000 EACH*- 10.000 TONS OF BEET SUGAR EACH o= 10000 TONS OF CANE SUGAR Fig. 10. United States production of beet sugar, 1949. [15] Table 4. Production of Refined Sugar by States (1949). Region and States Tons Per Cent of Total Beet Sugar North Central States Michigan Nebraska Minnesota 119,949 74,335 72,534 28,489 21,391 5,522 4,072 7,682 8.0 5.0 4.8 1.9 1.4 0.4 0.3 0.5 Ohio Iowa Kansas Wisconsin South Dakota Total for region 333,974 411,099 310,728 125,888 102,484 62,239 60,255 52,039 42,038 22.3 27.4 20.7 8.4 6.8 4.1 4.0 3.5 2.8 Mountain and Pacific States California Colorado Idaho Montana Utah Oregon Wyoming Washington Total for Region 1,166,770 77.7 Total United States 1,500,744 100.0 Cane Sugar Louisiana Florida Total United States 389,000 97,000 80.0 20.0 486,000 100.0 Source: "The World Sugar Situation," U.S. Dept. Agr., Bur. Agr. Econ., December 1950. acres in 1943. In 1948 and 1949, about 690,000 acres were harvested as com- pared with 880,000 acres in 1948, and 920,000 acres in 1950. These fluctuations occur uniformly in all states, indicating that weather is not an important factor responsible for increases or decreases in acreage (figure 11). Since 1930, significant changes have occurred in the relative importance of the various states in regard to both acreage harvested and the volume of beets pro- duced (Table 5). During 1945-49, Ohio, Michigan, Nebraska, Wyoming, Colo- rado, and Utah each had a smaller per- centage of all acres harvested and of all beets produced than during 1930-39. On the other hand, increases in percentages of both acreage and of beets produced took place in Idaho, California, and in the other beet producing states. In Mon- tana, although there was an increase in [16] 05 OS O p IO 00 q oq co t-j i tN | q o rH a 00 t> co co co t-^ d d OJ Hrl o tH tH 01 04 00 oo eq rH oo Csi •* q q q o (A in d c* c^ Ci d ^< QQ ^1 £» ^£ T-l T-l tH 8 tH * o o> tfl T-l O t> rH 04 eo 04 k fr- IO tH tH OS 00 «— 1 Tj* Tj^ ^Ji t» CL r-i t> CO fr- IO ■<* IO ^ H M W 00 6 co IO tH CO CO OJ tN "O eo CM tH at c 04 rH 04 4) 0> OS rH CO CO CO CO c< IO to tH H rl t- o 04 a. w rH < ® X 5 2« 04 CO CO CO o rH 00 IO O t- Oi CO "^ ■«* CJ O 09 IA iH CO co c~ co t- O tH tH tH t- O 04 tH 3 tH eo fa- OS m co a a I the percentage of all acreage harvested, there was a decline in the percentage of beets produced. During 1945-49, al- though California had a somewhat smaller acreage in beets than Colorado, it had supplanted Colorado as the most important beet-producing state. In 1950 it outranked Colorado in both acreage harvested and in volume of beets pro- duced (figures 11 and 12). ocd roro CD o OJ *■ (O oo o ^ ^- * * <+ «o CD CD CD CD CD CD 3000 2500 2000 00 § I ,ooo| 500^ 1 IDAHO, WYOMING, AND UTAH OCD roro CD OCD roro CD cm * o> 200 160 Ul g 120 < § eo | 40 I CALIFORNIA O0) roro 0) 200 200 w 160 3 120 o 80 o o 40 IDAHO, WYOMING, AND UTAH OO) roro 200 w 160 o,20 | O 8o| i o 0J t <0 3 o oo> 0) 0) 0) 0) 0) COLORADO o CVJ * <0 00 O *• * * «■ ti- m 0) 0> 0) o> er) 0) Fig. 12. United States production of sugar beets: by states. PRODUCTION OF SUGAR IN CALIFORNIA... centers in three areas. Although sugar beets are produced in about half of the 58 counties of Califor- nia, there are three dominant areas of production (figure 13) . The first area in- cludes four adjacent counties in the south- ern part of the Sacramento Valley region plus San Joaquin County in the San Joa- quin Valley region. In 1949 these five counties accounted for 42.8 per cent of the total acres in beets in the state. A sec- ond region includes four adjacent coun- ties in the Central Coast region which to- gether had 18.2 per cent of all beet acre- age in the state. The third important region is Imperial County in the South- ern California region with 22.2 per cent of the acreage. These ten counties to- gether accounted in 1949 for 83.2 per [19] SHASTA LASSE i MENOOCINO 1—42.8 percent 2—18.2 percent 3—22.2 percent 6AN fHANCISCOI IANTA AAASAAA LOS ANQCLCt SAN BERNARDINO EACH D0T= 1000 ACRES Fig. 13. Acres of sugar beets harvested in California in 1949. cent of all beet acreage in California. In 1949 the average yield per acre of beets harvested ranged from 10.5 tons in Yuba County to 28.9 tons in Santa Cruz County with a state average of 18.5 tons. There is also considerable variation in the sugar content of beets produced in the various counties. The normal percentage of sugar per ton of beets marketed varied from 14.7 in San Joaquin County to 18.2 in Alameda and Imperial Counties. Yield per acre and per cent of sugar produced per ton of beets tend to run higher in the counties in the Central Coast region. As a result this region, with only 19.8 per cent of total acreage harvested, produced 22.9 per cent of all beets marketed, and 23.5 per cent of all sugar produced in California in 1949. The corresponding figures for Imperial County were 22.2 per cent (acreage), 19.7 per cent (beets har- vested), and 20.3 per cent (sugar pro- duced) ; Yolo County with 19.0 per cent of the acreage harvested, 19.8 per cent of the beets produced, and 20.1 per cent of all sugar produced in the state in 1949. [20] PRICE RELATIONS... involve processors' prices, government subsidies, fluctuating acreage. Producers of sugar beets receive re- turns of two kinds: the price per ton re- ceived from processors, and the payment per ton made by the government in ac- cordance with the Sugar Acts of 1937 and 1948. At the beginning of each year growers enter into a contract with proces- sors to plant a stipulated number of acres of beets. This contract specifies a sched- ule of prices to be paid to producers graduated on a basis of yields per acre and sugar content of beets. The average annual returns (price per ton plus government payments per ton) received by growers of sugar beets in the United States have risen steadily since 1930, both absolutely and percentage- wise (figures 14, 15). Returns per ton increased moderately between 1930 and 1940, but rose sharply during the war and postwar years. Because yields per acre have risen since 1930, gross returns per acre have increased at an even greater rate than returns per ton of beets. Wholesale and retail prices of sugar showed no appreciable trend during the 1930's, increased appreciably between 1940 and 1942, were stabilized between 1942 and 1945 (under price controls), /—RETURNS TO PRODUCERS PER TON AVERAGE FARM PRICE PER TON Fig. 14. Returns to producers for beets, and wholesale, retail sugar prices, 1930-1950. KKU 200 180 RETURNS TO PRODUCERS - — ^ 1 ^ 160 140 RETAIL PRICES^ / '/ 120 100 \ \^f^\7^ =Q-r^\" / ^-WHOLESALE PRICES 80 O K> 01 1932 1934 1936 CO o 2 2 1942 1944 1946 1948 1950 Fig. 15. Relative changes in returns to producers and wholesale, retail sugar prices, 1930-1950. but again rose sharply in 1946 and 1947. Relatively, however, wholesale and retail prices of sugar have not increased as rapidly or to the same extent as returns to sugar beet growers. Fluctuating acreage: why? There appears to be very little direct correlation between acreage of beets planted or har- vested and the returns received by grow- ers during the crop year, or during the preceding crop year (figure 16) . Between 1938 and 1940, returns per ton to grow- ers increased each year. Acreage har- vested, however, declined somewhat in 1939 and 1940 and sharply in 1941. Re- turns per ton to growers continued to rise rapidly after 1942, but acreage har- vested declined precipitately in 1943 and 1944. The lack of correlation between acreage harvested and returns per ton is apparent even if returns per ton are ad- justed for changes in the general price level. For example, during the years 1944 to 1947 adjusted returns per ton (broken line in figure 16) declined appreciably, whereas acreage harvested during these years increased considerably from the lows of 1943 and 1944. It is evident that several other factors, apart from returns per ton, are respon- [21] 1000 900 800 700 600 3 500 < O 400 o o 300 200 100 AVERAGE RETURNS PER ^ / TON TO PROOUCERS /^S ACRES OF BEETS / * HARVESTED / \ / \ yy \ ^ V_ ___/ x7 \ / ^x -v /v \ / y^ ^ \ / ^ -"^^S^ ^0^ S\ / \ \ / ^ ^> — - — , / \ / \ \ >y S^\ , *** — "" \ / - — f \s' AVERAGE RETURNS PER TON TO PROOUCERS (ADJUSTED) -*" 6 5 J o O CM * «D CO O CM * <0 «D O to & 2 — o> o> o o> 0> CO 0> Fig. 16. Acres of beets harvested, unadjusted and adjusted returns per ton to producers, United States: 1930-1950. sible for marked year to year fluctuations ally high acreage planted to beets, much in acreages planted to sugar beets and of the land so involved will be planted to harvested. Three factors are: other crops, for cultural purposes. (1 ) One or more years of exceptionally (2) Availability of labor is an impor- high acreages are followed by one or tant problem, particularly during time of more years of low acreage, as the follow- war or during periods of full employ- ing shows. ment. Persons familiar with the sugar High Acreage beet industry of California ascribe the low ^° r AC QRq a nnn ed acrea g es °f Deets harvested in 1943 and ■iQift ' Qi a ooa 1944 to anticipated shortages of labor at I049 954 000 harvesting time. Improvements in cul- I947 331 000 tural practices (e.g., segmentation of beet seed) and increased use of mechanical Year Acres harvested equipment for harvesting should to some 1934 770,000 extent decrease the importance of the 1941 755,000 labor factor in the years ahead. 1943 550,000 (3) A third condition responsible for 1948 694,000 vear t vear fluctuations in acreage This phenomenon may be due to the planted to beets is competition with other fact that in most of the sugar beet pro- crops. Most of the land suitable to the ducing states there is only a limited acre- production of sugar beets is also adapted age suitable or available for beet produc- to the production of other crops. With tion. Experience has shown that beets due consideration to rotation practices, should be grown on the same land only farmers tend to allocate acreage to those once in three or four years. We thus ex- crops from which they expect to earn the pect that after a year or two of exception- highest net return per acre. Anticipated [22] changes in the price relations between beets and other competing crops, antici- pated yields per acre and production costs, are factors which farmers consider when allotting sugar beet acreage. In California the more important crops that compete with sugar beets for land are barley, beans, alfalfa hay, and can- ning tomatoes. In the Salinas area and in the Imperial Valley, lettuce is probably also a competitive crop. Cotton in the lower San Joaquin Valley also is a fac- tor — both direct and indirect. If cotton acreage is decreased in any year, part, at least, of the acreage released may be planted to beets. A larger proportion, however, would probably be planted to alfalfa. If this happens, alfalfa produc- tion in the state would be increased. In the absence of a material increase in the demand for alfalfa, prices of this com- modity would tend to decline. Producers in the upper San Joaquin and in the lower Sacramento Valley would then plant a smaller acreage to alfalfa. Relative changes in prices of sugar 300 280 260 240 220 S 200 o ; ieo to at 7 160 in CO * 140 I- u 120 o uj 100 a. 80 60 40 20 SUGAR BEETS BARLEY HAY TOMATOES i L if / // /i if] /A \\ Af V\ / — x // 7 \y ■ k A \r \ ^t 360 LEGEND 340 Sugar beets Cotton 320 LETTUCE 300 280 260 o o 240 / h <7> q> If) fO a> i- z UJ o