DOMESTIC BEET SUGAR PRODUCTION
INTRODUCTION
The history of the domestic beet sugar industry, most of which also
applies to the cane sugar industry, was summarized by Shamel (1981) in
four main periods. During the first period, covering the fifty or so years
prior to 1934, the beet sugar industry grew from fledgling size to one
offering opportunities to the risk-oriented entrepreneur. Processors,
attempting to reduce the risk on the marketing side, developed the so-
called “sugar trust" which was disbanded after being declared illegal. The
risk-sharing or participating contract was a successful attempt made
during the 1920s. Intended at spreading the risk between producer and
processor, many of them still exist today in essentially the same form.
This early period was characterized by Shamel as “one of strong
leadership, innovative owners and managers with high risk orientation"
(p. 14).
p a forty years of the Federal Sugar Programs (1934-74) were
included in the second period. The general framework was one of a
controlled environment. There were production controls, acreage and
marketing allotments, import quotas and price stability. A stable per
capita consumption, with moderate growth in total volume, brought about
some opportunities for plant expansion, but generally the low risk meant
low profit potential. As the result of a protected environment, caretakers,
managers and technologists became risk averters with each group
involved in enhancing its relative position with little attention given to the
process as a whole.
The period between 1974 and 1980 was the third one. In 1974, when
the Federal Sugar Program was terminated, the sugar industry lost its
protected status. Sugar prices skyrocketed as did those of energy,
supplies, equipment and money, resulting in an environment with a high
risk of failure. Although sugar prices turned down in a short period of
time, other prices, including those of the inputs used in sugar production,
remained up. High fructose corn syrup (HFCS) eroded part of the
sucrose market as the result of a mature technology and high sugar prices
in 1974 and 1975. At the same time, the attack of nutritionists and