l97 submitted to the faculty of the

l97 submitted to the faculty of the

THE ECONONIC FEASIBILiff OF SUGA.R-BET PRODUCTION FOR SUGAR fl TEE SALT RIVER VAT,TJY OF ARIZONA by

Mohamed .Amin A1-Jaff

(IRAQ)

A Thesis

submitted to the faculty of the

Department of Agricultural. Economics

in partial fulfiThnent of the requi.rements for the degree of

MASTER OF SCIENCE

in the Graduate College, University of Arizona

l97

This thesis has been submitted in partial fulfiThnent of requirements

for an advanced

degree at the University of Arizona and is deposited in the University Library to be made available to borrowers wider rules of the Library.

Brief

quotations from this thesis are allowable with.

out special

permission, provided

that

accurate acknowledgment of source is made.

Requests for permission for extended quotation from or reproduction of this manuscript in whole or in part may be granted by the head of the major department or the Dean of the Graduate College when in their judgment the proposed use of the material is in the interests of scholarship.

In all other instances, however, permission must be obtained from the author.

APPROVAL BY THESIS DIRECTOR

This thesis has been approved on the date shown below:

Andrew Vanvig

'

Associate Professor of Agricultural Economics

/

'Date

, ii

ACKLEIKENT

The author wishes to acknowledge, with most grateful appreciation the outstanding efforts, advice, and helpful suggestions received from Dr. Andrew Vazwig, Director of the Thesis, Dr. G. W. Barr, Head of the Department of Agricultural Economics, and Dr. Raymond E. Seltzer,

Professor of Agricultural Economics.

He wishes also to thank Dr. Keith

Hamilton, from the Agronoir

Department, for his reviewing the agronon chapter of this study.

The author is also indebted to Government and State Offices,

Agricultural Experiment Stations, and Sugar Coanies mentioned in this thesis f or instruction, illustrations, and materials.

iii

TABLE OF COENTS

Chapter

I

IRC)UCTION

The Imperial Valley of California and the Salt River

Valley of Arizona

Imperial Valley of California

Salt River Valley of Arizona

.

II

SUGAR BEET AGRONO

Sugar-Beet Experiments in ArizOna

Early Experiments

Recent Experiments

III

THE ECONOMICS OF SUGAR BEET PRODUCTION FOR SUGAR flT THE

SALT RIVER VALLEY

Sugar Beets in

the Cropping System.

Security in the Sugari. eet Industry, Government Incentives, and Compensation Disaster Losses

Sugar-Beet Marketing, Pricing, arid Payments to Growers

The Grower-Processor Contract and the Division of the

Net Proceeds

Arizona

Sugar Beets as A Possible Alternative Crop in

The Importance of Sugar-Beet By-Products

Arizona Livestock and Feeding Situation

Sugar.eet

By-Products as Feed for Livestock

IV

FACTORY REQUIREMENTS AND THE QUALTWICATIONS OF ARIZONA

TO MEET THESE REQUIREMENTS

.

Page

S

8

10

18

27

30

31

36

39

1O i41

1

SO

3

10

22

23

Factory Reqiirements

Water Supply

Limestone

Fuel

Labor

Market

51

51

53

51i.

55

iv

TABLE OF COENTS (continued)

Chapter

Who May Build the Factory for A Sugar Industry in

Arizona

V

SUGAR QUOTA AND ACREA.GE

ALLOT]NT

Page

Conditions Leading to Sugar Acts

The Sugar Acts of

Sugar Act of 191i.8

193I, 1937, and

].9148

The Sugar Quota

Payments to Growers ccise Taxes

Sugar Beet Acreage Allotment

Administration of Proportionate Share Program

Subdivision of State Acreage Allocation

Establishment of Individual Proportionate Shares For

Old Operator Farmers

Set.-Aside Acreage for New

Producers, Appeals, and

Adjustments

Arizona and Possible

Acreage Allotment

What Might Be Done to Get Allotment For Arizona

7

76

77

....

8].

6S

70

72

72

73

7li.

61

61

62

6b

VI

SuMMARY AND CONCLUSIONS

BIBLIOGRAPHY.

82

87

V

LIST OP TABLES

Table

1.

Yield and Percentage of Sugar Content of Sugar Beets at the Yuma Experiment Station Compared With the Imperial

Valley of California, 1968-1i9

2,

Yield and Sugar Content of Sugar Beets in the Salt River

Valley Compared With Imperial Valley,

1955

3.

Sugar Beets and Sugar Cane, Quantity of Sugar Produced, and Prices Received by Farmers Per Ton, and Total Sugar

Production, United States, 191i.6-l956

lj,

Probable Costs arid Income of' SugarBeet Production in

Arizona, Based on Expected 2OTon Yield Per Acre

5,

Tots]. Cash Receipts from Farming (Crops and Livestock),

Cash Receipts From Livestock and. Livestock Products, and

Percentage that Livestock Receipts are of the Total Cash

Receipts from Farming, Arizona,

1950..1956.

6.

Three Typical Rations Used in A Shortfed Feeding Pro..

gram in Arizona

7.

Average Feed Prices in Arizona,

1955-56

8.

The Relative Cost of Net Fattening in Common Feeds

9.

Sugar Consumption and Total Amount Spent for Sugar in

Arizona,

19!j.7-l9Sli.

10.

Sugar Can and Sugar Beets:

Receipts from Foreign Sources and Territories, Local Production, Total and Per Capita

Consumption, United States, l91i.7-195J.i.

11.

Sugar Beets, ?a3ments to Growers Per Ton, United States,

19li7-1951i.

12.

The

191i.3-1952, 1953, and l95I Sugar

Beet Crop, Acreage

Base with National and State Allocations for the

1955,

1956, and 1957 Sugar Beet Crops for Comparison

Page

19

21

31

38 li.0

57

7].

79 li3

Li.3

li.8

56 vi

LIST OF FIGURES

Figure

Beet Sugar and Cane Sugar, United States Production and

Prices Received by Farmers per Ton, l9Li6 -1956

Total Cash Receipts from Farming and the Percentage Which

Receipts from Livestock and Livestock Products Are of the

Total in Arizona, l%O-].%6

Acreage Allocation for Sugar Beets, United States.

19I3l%2 Base Allocation and Annual Allotments, l95357

Page

32

Iii

80 vii

CHAPTER I

INTRODUCTION

In vi of the federal crop limitation program,

Arizona farmers are looking for crops to replace cotton on the diverted land.

This is not a simple problem because no crop grows extensively on Arizona lantts that has proved to be as profitable per acre as cotton.

The choice of profitable alternative crops under the present existing agricultural sit'uation in Arizona is limited.

In many cases producers planted the land taken from cotton to another crop, although economic conditions alone might not have justified this decision.

The acreage control program resulted in production decisions which are not necessarily economically sound.

Accordingly, because of the existing agricultural situation in

Arizona, cotton producers and other farmers are anxiously seeking a pro-

±'table alternative crop.

Available evidence indicates that sugar beets can be grown for

sugar in both

quantity and quality in the Salt River

Valley of Arizona.

Sugar.-beet seed is presently being successfully pro.duced in Arizona.

Early and recent experiments regarng the possibility of successful sugar-beet production, for sugar, have had positive results.

The earlier results of experiments were put in practice and. a sugar factory was established for the beet

sugar

industry in Arizona in l9O.

1

The factory, however, did not long exist primarily because cotton, which at that time could be grown on unlimited acreage, provided higher returns.

Now, with acreage controls on cotton, sugar beets appear to be a profitable alternative.

Therefore, Arizona farmers are asking the question,

"Why shouldn't we grow sugar beets

for

sugar since they are grown successfully in the Imperial Valley of California,

an area with similar soil,

climatic, etc., conditions with the Salt River VaUey?' They would like, too, to enjoy the profitability of the crop resulting from the returns of the sugar extracted from the beets and from the sugar-beet

by-products,

which would be

a

valuable addition to the livestock feed resources of

Arizona, and would thus give additional impetus to

what is

already one of the most profitable industries of the

Salt

River Valley.

For the purpose of answering the above question of Arizona farmers, a detailed study of all the interrelated problems and conditions which determine the profitability of sugar-beet production in the Salt River

Valley has been undertaken under actual Arizona

conditions and in

the light of the Sugar Act of 19148.

An effort has

been made to determine whether the production of sugar beets for sugar can be a successful industry in Arizona,

Several methods have been used to obtain facts concerning the above-mentioned question of Arizona farmers. Both past and recent experi...

ments, in sugar-beet

production for sugar in the Salt River Valley, have

been reviewed and the

agronoinic aspects of the problem have

been analyzede

Conditions

under which sugar beets are produced successfully in the

Imperial Valley of

California, an

area similar to the Salt River Valley,

3 have been reviewed and studied. A number of farmers and individuals who are interested and well-informed with respect to the requirements for successful sugar-beet production have been consulted arid interviewed,

In addition to the agronoinic aspects of the problem, the economic feasibility of sugar-beet production for sugar has been analyzed in an effort to answer the question of Arizona farmers as to why should we not grow sugar beets?"

The problem is also considered with respect to sugar..

beet factory requirements arid with regard to the various Sugar Acts providing for state and national quotas and allotments.

It is hoped that this study will help Arizona farmers to achieve their primary economic objective, i.e., to obtain the optimum returns from the use of the Valley resources by the most effective and judicious combination of the various possibilities.

The Imperial Valley of California and the

Salt River Valley of Arizona

The production of sugar beets for sugar and the establishment of a successful sugar industry in the Imperial Valley of California was an iiiortant impetus for making this study, "The Economic Feasibility of

Sugar-Beet Production for Sugar in the Salt River Valley of Arizona."

This is because of the similarities of conditions under which sugar beets are grown in the two areas and because a sugar industry has been established successfully in the Imperial Valley.

For the purpose of our study and because of our references to the

Imperial Valley, it is desirable to make certain general remarks regarding

14 both of the valleys.

It will be seen that many of the conditions required for successful sugar-beet production are similar in both of the big agricultural valley-s.

Imperial Valley of California

The Iiierial Valley

of California

is an agricultural valley located in the southwest desert region.

Being closely encircled by arid mountain ranges, it is shut off from the moderating effects of moist ocean winds, and the hot and dry climatic conditions are plainly reflected in the characteristics of the soils.

General Features:

Soil:

The soils, in general, are somewhat heavy in structure and are a clay loan, calcareous, and low in humus content.

Certain sections are in need of artificial drainage, and alkali is troublesome in many localities.

Climate: The climate is arid; the mean annual precipitation is very low. At Calexico, for example, the annual precipitation is

3.14

inches, and at Brwley, 2.147 inches.

The summers are long and hot.

The mean annual temperature is 71° F. at Calexico, and 70.3° F. at Brawley.

The normal growing season is about 300 days, although agricultural operations are continuous throughout the year.

Supply of labor: The supply of labor is adequate and somewhat cheap because of availability of Mexican nationals.

S

Farndng:

Farzning in the Imperial

Valley is

entirely by irrigation.

The water supply is relatively abundant.

The Valley in 1900 was a barren

desert

entirely uninhabited, however, in 1901 and later on with the introduction of irrigation, the population of the Ierial Valley has grown to an estimated 7li3O00 in l96,

The Valley is devoted principally to the production of the follow-' ing crops and livestock.

1.

cotton

2.

sugar beets

3.

citrus fruits

5.

alfalfa

6.

dairy and livestock products

7.

lettuce

L.

truck crops

Sugar

beets,

however, had not been introduced to the Valley in its ear1est agricultural

development in 1901,

nevertheless, it became one of the most important crops shortly after 1901.

Salt River Valley of Arizona

General Features:

The Salt River Valley is

the most

fertile and the largest agricultural area, and the most populated area of Arizona, It is in the southcentral part of Arizona.

It occupies a part of a large valley extending on both sides of

the Salt

River.

Soil:

The soils of the Salt River Valley, generally, speaking, are aily supplied with the more essential mineral-ash plant foods, including lime, potash, and phosphoric acid.

Nitrogen and humus, however, are

6 undoubtedly deficient in quantity, and the addition of these soil ingredients is desirable, perhaps imperative.

However, one of the methods of supplying the lack of humus and nitrogen, and of improving the tilth and water-holding power of these soils is by growing leguminous crops upon the lands and plowing them under as green manure.

So far as known, alfalfa and crimson clover are the best of these, and their use for this purpose is undoubtedly an essential part of any scheme of crop rotation for this region.

Alkali salts are not prevalent in excessive amounts except in occasional localities of limited area.

The injurious effects of alkali here are very limited, and adequate dra nge has in the main been effected by a system of electrically-operated pumps and a few open drainage and waste ditches.

Climate: The climate is warm and arid.

Temperatures vary considerably in different parts of the Valley.

The climate is characterized by high niaximuin and mean temperatures; long, hot summers and short,ini1d winters; low annual rainfall; low relative humidity; rapid evaporation; and a high percentage of sunshine.

The average frost-free season is 292 days.

The rainfall, though normally light, varies greatly from year to year.

The mean annual precipitation at Phoenix is 7.87 inches.

Most of the rainfall occurs at two distinct periods - in midwinter and in late summer.

Supply of labor:

Supply of farm labor is principally performed by

Mexicans, supplemented by Indians from the Salt River and Gila Indian

Reservation, and migrant labor during harvest seasons for vegetables and cotton.

7

Farming: Farming in the Salt River Valley is entirely by irrigation.

The water supply is from the dams on the Salt and Verde Rivers and from underground water which is generally adequate.

The Valley is devoted principally to the following crops and live-.

stock.

cotton citrus fruits dates

).

truck crops

5.

lettuce

8 alfalfa grains da.irying and poultry cattle feeding sugar beets for seed

Winter pasturing and feeding of livestock are sources of considerable income to the farmers.

CHAPTER II

SUGAR Bli' AGRONOMY

The sugar beet is a most remarkable plant.

It is grown below sea level in the Imperial Valley

in California and at alpine elevations such as in the San Ltiis Valley in Colorado, where the altitude ranges from

7,OO to 7,800 feet above sea level.

In the United

States the sugar

beet is cultivated

as

a commercial crop from the Canadian border almost to the Gulf of Mexico in certain geographic areas.

In terms of length of growing season, the sugar beet is also a highly adaptable plant.

Profitable crops of sugar beets are produced in areas whose growing season is as short as l2 days, and sometimes less, and in regions where the growing season may be eight or nine months in length.

cainples of the former are in the Red River Valley of Minnesota and North Dakota, and of the latter in the Imperial Valley of California.

The background for this successful adaption lies not only in the ability of the beet plant to thrive under such edreme variations as have been indicated, but also in the brilliant work done by a number of American plant breeders in developing varieties adaptable to certain areas and also resistant to the diseases peculiar to certain beet-growing regions.

The sugar beet has been referred to as a cool-weather plant.

While it is grown

in

the Imperial Valley of California, it is not exposed

8

9 to much of the summer heat.

Here the beet seed is planted in September and October, and the plants are thinned in November and December.

They continue to grow during the winter months (when temperatures sometimes drop to freezing) and are ready for harvest in

May and June.

Along the

Canadian border, on the other hand, where the mean sumner temperatures do not reach the optimum of 67° to 700

F., the long daylight hours have a substituting effect for temperature.

Here the long summer days bring about active growth of the plant and make possible the production of sugar in a shorter period of time.

The statement, "It is the hours of sunlight that count", is often referred to, particularly in these northern regions.

The sugar beets, then, are a relatively cold-hardy plant and can also be classified as a long-day or sunshine.loving plant.

In light of the preceding facts with regard to sugari.beet culture, interested

people

in Arizona desired (and are desiring) to introduce sugar beets to the

agriculture of Arizona.

This desire was generated from the possibility of profitable production of sugar beets in the state,

Accordingly, the agricultural experiment stations in Arizona, in response to this desire, conducted a variety of experiments dealing with the culture of sugar beets.

The purpose of these experiments was to deter..

mine the facts concerning successful production of sugar beets for sugar and the possibility of their entrance into the cropping system in some localities of Arizona such as Yuma and the Salt River Valley.

Some of these experiments go back to 1897, and some of them are recent. We shall review, in this chapter, these old and recent experiments upon which we shall determine the possibility of their production.

10

The first part of this chapter is devoted to the early experiments since 1897 and. after, in the Salt River Valley.

The last part of it is devoted to the results of experiments conducted recently in both luma and the Salt River Valley.

Favorable results, as we shall see, were obtained.

Sugar Beet Experiments in Arizona

Early Experiments

"The establishment of a beet-sugar factory in Eddy, New Mexico, on one hand, and at Chino and. Los A].amitos in Southern California, on the other, had naturally led the people of Arizona to inquire as to the possibility of growing paying crops of sugar beets in the irrigated valleys of the territory".1 In response to this demand 1' or information, the agricuj.-.

tural experiment stations in the spring of 1897 undertook to ascertain the behavior of the sugar beet under Arizona conditions of soil, irrigation, and climate.

With this end in view, the cooperation of about 300 farmers in various parts of the Territory was secured, and seed of standard varieties, mostly Vilmonin and Klein Wanzlebender, obtained from the Department of Agricu1tur at Washington, was supplied, along with directions for preparation of the soil, planting, and care of the growing plants.

In the Salt River Valley these directions were supplemented with regular

1

Forbes, R. H., Sugar Beet Exeriments, Arizona Agricultural

Experiment Station Bul. No. 26,iiiversity of Arizona, Tucson, December,

1897, p. 1.

U inspections of the test plots by members of the station force, who made suggestions from time to time.

Carefully conducted experiments were also carried out on the substationt a grounds near Phoenix, and similar work was attented at Tucson.

The objectives of those experiments were to determine the following in Arizona:

Effect of soil on successful beet production.

Effect of climate on successful beet production.

Effect of time of seeding and harvesting.

b.

Effect of previous crop.

S.

Finding the best variety of seeds adapted to the local soil and climatic conditions.

Effect of irrigation.

Yield per acre.

Percentage of sugar content in the root.

Suitable rotations to crop the land and to

maintain soil

fertility.

In facts the above mentioned objectives are the core of determining the possibility of sugar-beet production for sugar in any area.

As to the effect of soil in which sugar beets are to be groini, it has been found that sugar beets could be produced in a variety of soils,

12 and any moderately fertile soil such as will grow wheat, corn, cotton, etc., will also be found suited to sugar beets?

Sugar beets have been found a good crop to plant even upon soils somewhat alkaline.

This is true in the slightly alkali soil in which sugar beets are successfully grown for sugar in the Lierial Valley of Ca)iCornia.

In this respect the soil conditions are expected to be more favorable for beet production in Salt River Valley of Arizona.

This is because of less a1k) inity than

Lierial Valley, and because of the efficiency of potash, lime, and phos.phoric acid.

Nitrogen is found deficient.

However, for the remedy of this defect the most practical method to be used is growing leguniinous crops on the land such as alfalfa, clover, and others, as we will see in our later discussion of the crop rotation and cropping system.

As to the effect of temperature and time of seeding, a range of experiments had been conducted in the vicinity of Phoenix, as shown below:

"1.

January 1 to ]$ - Seed germinates, but danger from frost.

January

15 to 31 - Seed germinates well, little danger from frost.

February 1 to l - An excellent

time

to sow seed.

14.

February 15 to 18 - A fairly good time to sow seed.

5.

March 1 to 15 - Somewhat difficult to secure stand.

1

periments, however, have shown that growing sugar beets upon extremely light, sandy soils and upon heavy adobe and clay soils should be avoided.

Medium soils of all kinds give satisfactory yields.

The Salt

River Valley of Arizona has the latter types of soils, as well as Imperial

Valley, which produce satisfactory crops.

Sugar beets grown in such soils, especially clayey loam and slightly coarser soils, would mature quickJ,y, thus enabling the factory to

begin

operation early in June, as we shall see, and the yield would be quite as satisfactory during the seasons of abundant water.

13

March 15 to 31

- Seed needed to be irrigated up.

April - Seed still germinates if irrigated.

May - Difficult to secure a good stand, even with irrigation.

June to September

- Inractica1 to secure a stand.

September 1 to

].5 -

Is difficult to secure a stand.

U. September

15 to 30 - Good stand can be secured with irrigation.

October - stand can be secured with irrigation.

November 1 to 15 - Somewhat difficult to secure a stand without irrigation.

]1.

November 15 to 30 - Seed germinates without irrigation, but danger of frost.

15.

December - Seed germinates but young plants apt to be killed

by

frost."1

To obtain satisfactory results, the experiments as shown

in

the summary just mentioned indicated that the best time for planting in the

Salt River Valley is during January and early February2, or as soon after the winter rains as the land can be plowed.

In gravelly or sandy barns, the planting may be done early in January, but seed should be withheld from the fine adobe soils until at least the heavier winter rains are thought to be past, Any soil can usually be seeded by the middle of

1

McClatchie, Alfred J., Sugar Beet Experiments During 1899, Arizona Agricultural Experiment

Station Bul. No. 31,

University of Arizona,

Tucson, December, 1899, p. 271.

2

This date of planting has not been tried with the new varieties in the recent experiments conducted in Yuma and the Salt River Valley.

November planting, however, with the new varieties, as we shall see later in the chapter, may be a good practice.

February and should be seeded by that date if possible.

The longer the seeding is delayed after the middle of February, the more irrigation will be required1, and the less growth will the beets make before they are checked by the higher temperature of sumtner,

The best results from wintersown beets were obtained from a sowing made during the latter part of

January and

the first ha]! of February. Beets will mature, however, and produce their results if sown as late as the middle of March.

Judging by the experiments conducted, it will not be profitable to grow sugar beets in the Salt River Valley during any other season than the one just mentioned.

The period from the beginning of April to the end of August, when beets are grown in cool, humid regions, is too hot and dry for successful beet culture here.

If they could be started during July and kept growing a month or so, the cooler weather that follows would enable them to make a good growth before they would be checked by the cold weather of Decent.ber. But with the temperature of the surface of the soil 11O0 to 150° F.

during the heat of the day, starting beets during July is very difficult.

Beets might be started during early June but would require so much irri-.

gation to carry them through the hot weather that their culture could hardly be profitable. As soon as the cool weather of Septeiriber and October comes, it is comparatively easy to secure a good stand of young beets.

But they do not then hare sufficient time to make much growth before they are checked by the cold weather of Decener and January.

In the Imperial

Valley of California, an area similar to Salt River Valley of Arizona,

This requirement of more water is very is a limiting factor of production in Arizona.

important because water

is from soil and climatic points of view, fall sugar beets are obtained very successfuflr from a sowing made during a latter part of September and October, and the crop will be ready for harvest by the second half of

May and June.

The results indicate that in Arizona's climate the desired qualities of beets are present in a winter-sown standing crop from about the middle of June to about the middle of August, and that it would be advisable to have all beets dug by the latter date.1

Thus, it was definitely settled, as a result of the experiments done, that suimuer planting of beets is impractical

in

the Salt River

Valley. Difficulties are encountered in securing a stand during weather when the maximum temperature is much above

95°

F.

The results of the experiments were that beet seed will not germinate satisfactorily in the

Arizona climate from early May to the middle of September.

while

the maxinium temperature of each day is above 1050 F., a stand of beets cannot be secured.

Some of the seed may germinate, but most of it will not, and any youvg plants that appear soon succumb to the heat.

As to seeding, it had been found that the seed should be placed at a depth of three-fourths to one and. one-fourth inches in the lighter soils.

They may be sown deeper than in the heavy ones.

Fully twenty pounds of seed should be sown per acre.

A distance of twenty inches has proven to be a very convenient one for the rows.

As to the effect of the previous crop grown on the sugar-beet land, the results of the experiment indicated that lower

yields

would be

1

This is the only conclusion reached front the results of the past experiments.

Further tests of date of planting with the new varieties, obtained recently, are very necessary.

16 obtained from lands on which beets had been grown upon during the previous year, Whereas higher yields were obtained on

lands on

which alfalfa had been grown during the previous year.1

As to the effect of variety, the results of experiments showed that the variety Klein Wanzlebenens, among several other varieties tried in the old tests, was the best and gave the best results under Salt River Valley soil and climatic conditions,2

Since

1897, however, a number of variety trials have been made and new varieties have been found in the United States.

More variety trials are advisable in Arizona.

As to the effect of irrigation, the results of the experiments indi' cated that the highest yield of sugar was obtained from the February-sown seed irrigated once(May twentieth, when the beets were about three months old) provided that the soil should artificially be irrigated just before seeding.3

As to the yield per acre and the percentage content of sugar in the root, the results of the experiments indicated that the highest average yields 01' beets were 12.8S tons per acre, 13.8 per cent sugar in beets,

78.3 per cent purity4, 2,1L38 pounds per acre yield of sugarS,

1

McClatchie, Alfred J., 2° cit., Biil. 31, p. 266.

2

3

Forbes, IL H.,

22 cit., Bul. 26, p. 9.

McGlatchie, Alfred J.,

. cit., Bul. 31, p.

268.

By Upurity is meant the ratio of pure sugar estimated in the juice.

to total substances

McClatchie, Alfred J., and Robert H. Forbes,

Experiment Station Bul. No. 30, Sugar Beet Experiments

Arizona Agricultural

During 1898, Univer..

17

The region to the west of Phoenix in the Salt River Valley, because of the existence of a suitable water supply and the nature of the soil, would probably be the best portion of the Valley for the best cu].ture.

The averages of the five flats in this section were:

]$.2 tons of beets per acre, 13.]. per cent sugar in beets, 76.3 purity, 2,7b2 pounds of sugar per acre.

Finally, as to the suitable crop rotation1 to crop the land and to maintain the soil fertility (the Salt River Valley soils, as we indicated earlier, are deficient in humus and nitrogen, which are necessary for satisfactory crop production), the results showed that a mixture of about one per cent of humus is high2y desirable.

This condition can best be secured by plowing under alfalfa, or some other leguxninous plant.

Alfalfa should be turned under S to 18 months previous to seeding to beets.

In the meantime, grain or some other field crop may be grown upon the plot. A good practice is to turn under the alfalfa during April or May, and withhold water from the land until July, when it may be planted to corn.

As soon as the corn has matured, the stubble should be turned under to decay and add more humus to the soil.

Or, the alfalfa may be turned under during July and August, water withheld for a few months, and the land seeded to wheat or barley to be followed by beets the next season.

It is important that the plow point be kept sharp so that it may cut all the alfalfa roots.2

1

The common crop rotation followed now in the Imperial Valley is as follows:

2 years sugar beets, 3 years alfalfa, 2 years sugar beets or cotton, fallow, sugar beets.

2

Mcclatchie, Alfred J. and Robert H. Forbes, cit. Bul. 30, p. 209.

18

Recent Experiments

A variety of experiments have been conducted recently by the

University of Arizona Agricultural Experiment Station, The purpose of these experiments has been to determine some facts concerning the possibility of successful sugar-beet production for sugar in Arizona.

These facts include variety tests, date of planting and harvesting tests, yield of beets and sugar per acre, percentage o1 sugar content, effect of fertilizing, etc.

These tests were carried out in two Arizona localities: (i) At the Yuma Experiment Station, and (2) At the Mesa Experiment Station.

The results of these experiments, as will be seen in Tables 3. and

2, were quite satisfactory.

The yield per acre and the percentage of sugar content at both Yuma and Mesa were as satisfactory as those in the

Imperial Valley of California.

The results of the recent tests were also much more favorable than those obtained in the early experiments of 1897 and the years imniediate3 after.

In the early experiments, the maximum yield of beets per acre and the percentage of sugar content were 1.2

tons and 13.8 per cent, respectively, whereas the average yield per acre and the percentage of sugar content was 22.0 tons and 17.

per cent of sugar, respectivei,y, at Yuina in

1911B-L9, and reached 19.08 tons and 3.7

per cent, respectively, at the

Mesa farm in 19. Yields of 30 tons

per acre have been obtained on experimental plots at

Yuma.1

p. 126.

1

Reports from the University of Arizona Ywna Farm,

19S0-l951,

Table 1.

Yield and Percentage of Sugar Content of Sugar Beets

at the luina

cperiinent Station Compared With the

Imperial Valley of California, l98-149.

19

Factor compared

Yield per acre

Sugar content

Yuma Station

22.0

tons

17.

per cent

Imperial

Valley Station

l7.1S

tons

18.17

per cent

Source: Data from Yuma Farms - reports from University of

Farms, 19i8.4.9, p.

8.

Data for

Arizona Yuma

Imperial Valley

191i.9 Sugar

Program, p.

59,

Agricultural Stabilization and Conservation

Conunittee, Berkeley u, California

This increase in both the

yield

per acre and the percentage of sugar content in all probability was due to the development of new van..

eties and new techniques in beet

culture.

Accordingly, the recent experiments conducted with regard to successful sugar-beet production should be given greater emphasis.

Eowever,

In conducting further tests, the conditions under which the old experi-.

ments were made should be considered.

Such conditions such as date of planting and number of irrigations needed are very important.

In the early tests, the best results from winter-sown beets were obtained from a sowing made during the latter part of January and the first half of

February.

Making further tests on date of

planting, the

second half of

January and the first ha]! of February would be interesting,

especially

with the new varieties whLch were developed and proved to be successful under both Yuma and Salt River Valley conditions.

Moreover, in the light of the early experiments, a planting date of January

15 to February

15

20 would make the crop available for harvest by August.

The results of this proposed date of planting test, if it could be successful with the new varieties, will be advantageous from these standpoints:

The crop takes a shorter period of time, about seven months or less from time of seeding to the time of harvesting.

Less irrigation water will be needed.

This is very important in Arizona because water is the

limiting

factor in production,

Next, let us consider the results of the tests conducted at Ynma and Mesa and make a comparison with the actual situation in the Imperial

Valley of Call ornia where sugarbeet production has become a very successful industry.

The University of Arizona recently conducted an experiment at the

Mesa Fperiment Station to determine the possibility of successful sugarbeet production in the Salt River

Valley.

The test was conducted

in 1955

with two different American varieties U. S.

75 and U. 5.

56.

Very satisfactory results, as indicated in Table 2, were obtained.

The yield per acre of Variety U. S.

75 was excellent and was very close to the yield in the Imperial Valley.

Sugar content, however, was higher than the Imperial Valley.

Further tests as to the date of planting and vari.

eties are needed.

Table 2 shows the results of the test conducted, comm.

pared with the crop situation in Imperial Valley in

1955.

Table 2.

Yield and Sugar Content of Sugar Beets in the Salt River

Valley Compared With Imperial

Valley, 1955.

21

Variety

U. S.

75

13. S.

56

1

Mesa Farms1

Average lie1 d tons7acre

'

Sugar cent

19.08

!

:

17.0

10.53

!

I

18.2

I

,

!

'

Imperial

Valley Farms2

Average3

Yi].d

tons/acre

Sugar cent

20.50

I

In Mesa farms, planted November 15,

1955, harvested August 3, 1956.

Irrigated Nov. 16, Dec. 31, Jan. 25, Feb. 23, March 10, March 29,

April 12, May 16, May 30, June

15,

July U. Pre-planting irrigation

Oct. U.

2

The sugar content of the beets produced in the experimental plots in the Imperial Valley was 16.2 per cent.

Notice it is less than the sugar content in the Salt River Valley.

However, the yield per acre in the Imperial experimental plots was

River Valley.

The more than the ones in the Salt

yields per

acre as

it is noticed are 28 and 19.08

tons, respective]y.

However, the yield

per

acre in the latter may be used in the case of further experiments.

AU varieties.

Source:

Data for

Imperial Valley

1955

Sugar-beet Program, In California, Agricultural Stabilization and Conservation,

Berkeley b,

California, Table 2, p. Ii.

Data for Mesa farms

Annual Report of the University of Arizona Agricultural Experiment Station,

Mesa, Arizona, for the year ending December 1956.

CHAPTER m

THE ECONOMICS OF SUGAR BEET-PRODUCTION FOR SUGAR

IN THE SALT RIVER VALLEY

From the preceding chapter on the results of past experiments, it wilL be seen that sugarbeets of satisfactory quality and quantity can be grown in the Salt River Valley.

However, this by no means solves the problem unless it can be shown that sugar beets are a profitable crop and that a factory can be established and an acreage allotment for sugar-beet production in Arizona can be secured.

In this chapter an attempt will be made to determine the economic feasibility of sugar-beet production in the Salt River Valley.

The first part of the chapter is devoted to an analysis of the costs and. returns from the sugar-beet crop in comparison with alternative crops.

The latter part of the chapter discusses the importance of sugar beet by-products

(beet tops, beet pulp, and. molasses) for livestock feeding.

The problems of both the requirements for the establishment o±' a factory and the qualification of Arizona in this respect and the sugar quota and sugar-beet acreage allotment will be discussed in the next two chapters, respectively.

In order to make the goal of this study positive, therefore, the following should be available:

1. A good quantity and quality o± sugar beets must be available.

22

23

Sugar beets must be a profitable crop.

A factory for processing sugar beets must be established.

I.

An acreage

allotment allowing

sugar-beet production

must be secured.

Sugar Beets in the Cropping ystem

The agronomic feasibility of sugar-beet production for sugar in

the Salt River Valley has already been determined.

The next step is the

determination

of the profitability of sugar-beet production for sugar in

competition with

other crops or in supplementing them

to

provide an additional profitable crop

to Arizona farmers.

Perhaps one of

the reasons for the disappearance and failure of the beet factory which was erected at Glendale, Arizona in l9O was the failure of the

sugar-beet crop to

compete with cotton.

However, even with the assumption that sugar beets could not compete with some of the other crops such as cotton, this does not mean the culture of sugar beets should be forgotten0 Evidently sugar beets can play an important role in Arizona agriculture under the existing agricultural situation in

Arizona.

Cotton, which is

the principal

crop in Arizona, is under production restriction (acreage allotment).

Farmers are not allowed to grow as much as they want because of the over-production of cotton.

Therefore, farmers are looking for more alternative

21

crops.1 This

is not a s:b]e problem because no crop grown extensively on Arizona lands has proven to be nearly as profitable per acre as

cotton.

The situation now is very different from the situation which existed in 1905, and the year after, when the erected beet factory failed.

Perhaps then cotton was more profitable than sugar beets and there were no restrictions to its production.

The idle lands now, which result from the restriction of cotton production, could be planted to sugar beets to supplement the return from other crops.

Sugar beets may more likely displace alfalfa, barley or grain sorghums,

In general, small grains, alfalfa, and cotton compete for land in the cotton-producing areas of Arizona.

In the cotton producing areas, small grains and alfalfa are considered more or less as supplementary or complimentary crops and are not largely depended upon as primary sources of cash income as compared with cotton.

Under the present price support program, acreage

allotments

and quotas for cotton are established for each farm in the producing areas,

In order to maintain his allotment, each producer has to plant his entire yearly alloted acreage

of

cotton, with the exception of that part of the allotment placed in the acreage reserve of the Soil Bank,

In some cases, allotments are changed from year to year.

Since the current acreage allotment program was put into effect, cotton producers have

1

Through the author's personal contacts with a nuiber of

farmers,

most of them large-scale farmers in the Salt River Valley, the farmers expressed, collectively, their dissatisfaction with the esent alternative crops, namely, alfalfa and grains.

They all welcomed the idea of introducing sugar beets, for sugar, into Arizona agriculture if this would be possible.

2S had to divert land from the production of cotton to alternative crops,

The choice of

profitable alternatives in Arizona, however, is limited.

In many cases producers planted the land taken from cotton to another alternative, although agricultural conditions alone might not have justi..

fled this decision.

In the Salt River Valley, as indicated in Chapter II, sugar beets can be grown for sugar successfully in both quantity and quality.

This crop has proven to be profitable in many localities in the United States,

In the Imperial Valley of California, an area with conditions similar to the Salt River Valley, sugar beets are raised profitably.

In the Imperial

Valley returns from both the sugar, which is extracted from the roots and from the by-products, make this crop highly profitable,

Sugar beets

are not the only profitable crop in the Imperial Valley; however, they are given an important

place

in the cropp:thg system.

Evidently, sugar beets for sugar seem to be a profitable alternative crop in the Salt River Valley, especially bearing in mind that there are limited profitable alternative crops in Arizona.

The Salt River

Valley of Arizona has equal, if not better,

qualifications than

the Imper.

Ia]. Valley to make this crop a profitable one.

This is not to say that sugar beets should necessarily replace cotton.

However, the role of the sugar-beet crop in the cropping system can be considered from the standpoint of competing with other crops, supplementing other crops (diversification), as we].]. as a complementary crop.

Perhaps the best base on

which to make

a sound decision Is

to determine the average net income per acre from different

prevailing crops in

the Salt River Valley, and an average net income per acre from sugar beets.

In this connection,

26 consideration of the net behavior of the land, on which different kinds of competing crops are grown, should not be forgotten.

This net behavior of the land bears either on soil exploitation or increasing soil fertil..

ity for the next crop.

This is important from an economic standpoint, particularly as far as the cost of maintaining fertility is concerned.

In this respect, as to the effect of sugar-beet culture upon the growing of other crops, it is an established fact that notwithstanrig the extensive cultivation of sugar beets, no decrease in the normal yield of cereals has taken place but has, on the contrary, been actually increased.

The growth of sugar beets requires that

the

soil be tilled to a greater depth, thus adding to the thrift also of other plants to be

cultivated

later on the same soil. Besides, some parts of the roots, which go to a considerable depth, would be left in the soil adding an amount of organic matter which is deficient in the Salt River Valley soil.

Another phase of the economics of sugar-beet production and the beet sugar industry is the considerable payroll which this industry affords people who work in the sugar factory.

Employment is also provided throughout the whole year, in the growing and cultivation of the beets during the growing season, as well as during the season the sugar factory is operated.

In order to make a sound evaluation of the economic role of sugar beets in the Salt

River Valley, it is necessary,

as was stated earlier, to consider the cost of and income from the crops which are competing for the land and capital resources, namely, cotton, grains, and a1fJ fa.

This will lead us to the question of whether agricultural resources as

27 now used or whether some re-direction of effort would result in a higher level of real income to the farmers of Arizona,

Before calculating expected returns from sugar beets, such things as government incentives to growers, conditional payments, sugar-beet pricing and marketing, and grower-producer contracts, which have an effect on grower" s returns from the sugar-beet crop, should be considered first.

Later in the chapter the profitability of a possible sugar-beet production in the Salt River Valley relative to the other alternatives will be shown.

Security in the Sugar-Beet Industry-, Government Incentives, and Compensation Disaster Losses

Few farmers can look to the future with as great a feeling of security as can the growers of sugar beets.

This reeling of security does not arise from the certainty that prices and income will continue to be profitable into the indefinite future,

It stems, rather, from the greater degree of favoritism, protection, and assistance received by sugar-beet growers from both the government ad the sugar companies.

As a result of government programs, growers can expect-protection from excessive market supplies and a continuation o± their subsidy payments.

Their very close relationship with the sugar companies means that they do not have to face future problems alone, Some of the individual production problems of the grower are taken over by the companies who can devote additional time and resources to their solution.

In addition, marketing problems, with which most agricultural producers must be concerned, do not confront sugar-beet growers.

28

The regulation of the sugar market through the quota system is supplemented by a system of benefit payments called conditional payments.

Conditional payments are financed out of the general funds for the treasury.1

The rates of conditional payments vary with the volume of sugar, raw value, produced from the cane or beets grown on a farm and are graduated downward from the smaller to the larger producers.

The basic rate of 4O.8O per hundred pounds of sugar, raw value, is paid on the first

3O short tons produced on a farm.

This rate is reduced progressively to a ]niniimlm of

O.3O per hundred pounds on all sugar produced in excess of thirty thousand short tons.

In computing the amount of the conditional payments,

"...the total payments with respect to a farm shall be the product of the base rate of

O.8O multiplied by the amount of sugar and liquid sugar, raw value, with respect to which payment is to be made, except that reduction shall be made from such total payments in accordance with the

following

scale: that portion of the quantity of sugar and liquid sugar which is

included within the following intervals

of short tons, raw value

1

However

a

tax on sugar provides funds for the Treasury which more than offsets the total of all conditional payments plus the costs incurred by the

Department of Agriculture in administering the Sugar Act.

These tax receipts exceed the cost of the program.

However, this is because the tax is imposed on all sugar (foreign and domestic) processed or imported for direct consumption and payments are made on domestic production only.

Conditional payments act as an incentive to growers to adjust their production to

the quota

and carry over needs.

The payments are conditional upon the producers meeting several requirements: (1) Employing no child labor, (2) Paying farm laborers in

full arid at wage rates not

less than those determined by the Secretary of Agriculture, and (3) Obser-.

vance of the specified allotment, if they have been assigned.

2

Sugar Act of 19t18, United States Department of Agriculture, Commodity Stabilization Service, Sugar Division, June, 1956, p. 19.

Short Tons of Sugar

3S0 to 700

700 to 1,000

1,000 to 1,00

1,00 to 3,000

3,000 to 6,000

6,000 to 12,000

12,000 to 30,000 more than 30,000

29

Reduction in the base rate payments per hundred weight of such portion

0.0

0.10

0.20

0. 2

0.27S

0.30

0.32

o.0

As far as acreage abandonment and crop deficiency are concerned, in adittion to the amount of sugar or liquid sugar, with respect to which conditional payments are authorized,

U...the Secretary of Agriculture is also authorized to make conditional payments with respect to bona fide abandonment of planted acreage and crop deficiencies of harvested acreage, resulting from drought, flood, storm, freeze, disease, or insects which cause such damage to all or a substantial part of the crop of sugar beets or sugar cane in the same factory district (as established by the

Secretary), country, parish, municipality, or local producing area, as determined in accordance with regulations issued by the Secretary, on the follow-

-lug quantities of sugar or liquid sugar:

With respect to such bona Linde abandonment of each planted acre of sugar beets or sugar cane, onethird of the normal yield of commercially recover able sugar or liquid sugar per acre for the farms, as determined by the Secretary.

With respect to such crop deficiencies of harvested acreage of sugar beets or sugar cane, the excess of 80 per cent of the normal yield of coimnerciafly recoverable sugar or liquid sugar f or such acreage for the farms, as determined by the Secretary, over the actual yie1d.1

1

Ibid., p. 18.

30

Sugar-Beet Marketing, Pricg, and Paiments to Growers

Typical grower-processor contracts state that the beets will be delivered to the factory by the growers.

Mllowever, the corporation shall pay all freight charges on beets loaded in cars where the corporation operates a beet dump.

In case beets grown under the contract, between the grower and the processor, are loaded into cars at a point where the corporation does not operate a beet dung, the corporation will pay the railroad freight charges for delivering to it such beets, provided cars are loaded to capacity.

Any extra charge the grower

Under the present contracting methods, as seen in the contract, when the grower and processor sign a contract for the coming season, the léve]. of the yearTs payments is left to be determined by the net returns that will be received from the sugar sold (1) from the one factory or (2) from a group of factories in one area.

Under the present quota arrangement, system prices received by sugar-beet grovers do not fluctuate considerably.

Growers, as indicated in Table 3, can secure a semi-fixed price.

Figure 1 shows trends in production of beet sugar and cane sugar in the United States and prices received by farmers from l91.6 to l96.

Contract from Holly Sugar Corporation, Imperial Valley District, item no. 8, l96-7 crop season.

Table 3.

Sugar Beets and Sugar Cane, Quantity of Sugar Produced, and Prices Received by Farmers Per Ton, and Total

Sugar Production, United States, ].9146-1956.

3].

19146

19147

19148

19149

1950

195].

1952

1953

195)4

1955

1956

SUQA.R BE1IS

1,522

1,839

1,370

1,570

2,019

1,5914

1,505

1,817

2, OIi.3

1,789 per ton

$ 13.53

13.01

13 27

13.61

114.10

lii. 35

13 9)4

13.145

13.25

13476

SUGAR CANE

000 tons

1435

377

1477

52].

56)4

1419

605

630

610

580

$777

8.3)4

6.86

7.38

9.0].

7.38

8.08

8.14)4

8 17

7.70

7.92.

Total

'United

States

'Productio

1of a

000 tons) t

5,621

7,14)48

7,3)43

7,580

8,279

7,737

8,10)4

8,1485

8,207

8,392

-

1

Jackson, Donald, D. B. DeLoach, and Rado J. Kinzhuber, Narketin

Sugar

Beets, U. S. Department of Agriculture, Agricultural Marketing Service,

Marketing Research Division, Nov., 1956 A No. 137, p. 23.

2

19)46-195)4: Agricultural Statistics 1955, U. S. Department of Agriculture, p. 714; and data for l95 and 1956: Sugar Reports, U. S. Department of

Agriculture, Commodity Stabilization Service, Sugar Division, Oct., 1956,

Report No. 5)4, p. 20.

"Under the present system of dividing income, the beet grower shares to the extent of 50

to 60 per

cent in the narketing risk of the industry, whether it is risk of lower price or risk of obtaining a higher price at too high merchandising cost,

Conversely, he has the opportunity for increasing his return.

Use of the national average returns, either net or gross, passes a large part of that risk to the processor - in whom title to the physical commodity has resided since

delivery of the beets."1

1

Jackson, Donald, D. B. DeLoach, and B.ado J. Kinshuber, Marketing Sugar Beets, U. S. Department of Agriculture, Agricultural Marketing Service, Marketing Research Division, A1 No. 137, Nov., 1956, p. 13.

32

2100

BEET SUGAR PRODUCTION

-

SUGAR BEET PRICES RECEIVED BY FARMERS

SUGAR CANE PRICES RECEIVED BY FARMERS

CANE SUGAR PRODUCTION

1800

U) z

0

I- 1500

U.

0

U) z

1200

U)

0

900

600

-

I

4p

I

(I)

300-

0

I

I

I

1946 1947

1948 1949

I I

I

I

I

950

1951

952

1953 1954

YEAR

I

955 1956 1957

-J

-J

0

0

IS

Li.

0 z

0

I.-

10

Lii a-

0

Ui

>

SW

0

Lii

Iii z

4

0

200

U,

Iw w

Figure 1.

Beet Sugar arid Cane Sugar,

United States Production and Prices Received by

Farmers per Ton, 191i6-l%6.

Source:

Table

3.

Normally, one must be paid for assuming a risk.

Under closely competitive conditions, a beet processor Will feel unable to guarantee unconditionally the same scale of payments that he now promises conditiona].J,y.

Most business

transactions do involve fixed prices, however, arid it is conceivable that beet growers and processors could reach agree-

ment on the value

and cost of the shift in risk involved.

In general, the prices of sugar beets reflect area dj fferences in transportation costs of sugar from competing sugar sources.

They seem to give clear evidence of rivalry among areas in a search for the best market.

ltThese differences in competition that influence sugar beet returns by area cannot be altered by any change in method of computation.

In addition to the regional differences, certain individual plants exhibit levels of net returns clearly different from the general run.

Conditions permitting such differences may relate either to a unique production or market situation or to different merchandising policies on the part of factory management.

An examination of the type of contract employed by sugar-beet producers and processors in the Intermountain and West Coast sugar-beet regions and consideration of their economic effects make the following points clear:

(l) Over the past three decades, no substitution of one of the national sugar price series as a basis of beet payients would have made a significant dif.

ference in beet prices.

(2) The processor and the grower have shared the marketing risks of the industry.

If either the grower or the processor is to carry a greater part of the risk than he carries under the present agreement, he will expect to be paid for doing so.

Any such change would be expected to appear as a change in the payment, or the scale of payments, for beets.

33

31t

(3) Complete removal of the marketing riske from the shoulder of the growers would require an entirely different basis of payments.

It would require a fixed price for beets of a given quality, determined before (and regardless of) the sale of the resulting sugar."1

The Grower-Processor Contract and the Division of the Net Proceeds

One basic type of grower-processor contract is in use throughout the sugar-beet regions.

The important uniform feature, as stated earlier, is the statement of a basis on which to divide the net proceeds from the sale of sugar in the coming season, rather than a statement of a fixed price to be paid for sugar beets.

The method of division differs between the East and the West.

In the East, the net proceeds from sugar sales for a season are normally divided evenly between processors and growers.

In the West, however, a more complex scheme is employed under which payments vary with quality of beets and payments for any one quality of beets vary with the average of the season's net proceeds per pound of sugar sold.

The contract normally states, as indicated in the following copy of the Holly Sugar Corporation Contract, Imperial Valley District, the acreage of beets that a grower will produce and deliver, the services that the processor will furnish to the grower, the supervision he will have over cultural methods, harvesting time and methods, and the time and conditions of delivery.

It also shows the scale of prices which the

Ibid.,

.

ILL.

ration in respect to production and proceding of beets and/or shipment or sale of beet sugar by virtue of any law, governmental reg- ulation, or order; and this contract shall obligate the Grower to grow and the Corporation to buy only such reduced acreage of beets.

pound for regular whole seed and fifty cents (50I) per pound for processed seed. An additional charge at rates to be established by the Corporation shall be made for special treatment of seed. Seed furnished by the Corporation shall not be planted upon any land not contracted to the Corporation. Any seed furnished by the Corporation and not planted shall be returned in good order In the original unopened bags to the Corporation at the end of the planting season, and the Grower credited therefor. No credit will be given for seed which, in the judgment of the Corporation, is not in good order when returned.

eased ó'r wilted beets, or beets that are not suitable in the judgment of the Corporation for the manufacture of sugar, anything in this contract to the contrary notwithstanding.

lower than shown in the foregoing schedule, the price to be paid for beets shaU be increased or decreasedinproportlon to the imme- diately preceding interval.

proceeds of all net beets delivered hereunder as specified in paragraph 1 hereof.

36 grower will receive for beets of various sugar contents, at various levels of average net return per hundred pounds, at which the seaso& a sugar may be sold,

Sugar Beets as A Possible Alternative Crop

In Arizona

As stated earlier in this chapter, in view of the federal crop limitation program, farmers are looking for profitable crops to replace cotton on the land left uncultivated or planted to less profitable alter native crops.

This is not a sImple problem because no crop grown extensively on Arizona lands has proven to be nearly as profitable per acre as cotton.

The net return to land and management per acre of cotton, with a two-bale yield, is about

4ll5.1

The main alternative crops which have been tried on large acreages, include alfalfa, barley, and grain sorghimzs.

Alfalfa, as an alternative crop, is more or less restricted to areas Lth a plentiful supply of water.

Barley and grain sorghumz have been grown successfully in Arizona on extensive acreages for many years.

They are comparatively low constuiiera of water.

The net returns from alfalfa and grains under current price and cost conditions are not large.

The estimated net returns for land and management from alfalfa hay per acre in the Salt River Valley for 1957 is only $23 (based on a 5-ton yield at a price of

$25 per ton).2

For

Barr, George W., Arizona Agriculture 1957, Ariz. Agri. Exp. Sta.

Bul. No. 21, Univ. of Ariz., ¶ucson, Jan., 1957, Table 2, p. 6.

2

I'oid., Table 14., p. 13.

37 barley the estimated net return is $31 per acre (based on a 1.6 ton yield at a price of $50 per ton),1 and for grain sorghum at a yield of

1.8 ton and a price of $50 per ton, the expected net return is $25 per acre2.

Cotton, as indicated earlier, is the most profitable crop in the

Arizona cropping system, with the exception of certain vegetables grown on limited acreage.

Its production, however, is restricted.

The present alternative crops (a1fa1fa and grains) provide much lower returns.

The introduction of a sugar-beet crop, for sugar, into Arizona s agriculture should provide an additional crop to replace part of the acreage now devoted to alfalfa and grains.

The profitability of sugar beets, as shown in Table

1,

would be second only to cotton in Arizona,

The possible net income per acre, with a yield of 20 tons, would be about

5.13 in the pumping areas of the Salt River Valley (at a pumping lift of 260 feet).

In the Salt River Project, however, because of the lower cost of water

(about $20 for b-acre feet), the possible net income would be about

7.l3

per acre.

It is noticed that the average net income per acre for sugar beets3 is more than double that for grain sorghum, alfalfa hay, and barley.

2

Ibid., Table

5, p. lb.

Thd

Table

6, p. 15.

The net income per acre of sugar beets is based on enterprise efficiency studies in Imperial County of California, an area with similar conditions to the Salt River Valley.

In this computation, the major cost item of sugar-beet production in the Lierial Valley has been considered and the cost of water has been adjusted to Arizona conditions,

The net income is calculated on the basis of an expected yield. of 20 tons per acre.

38

Table ii..

Probable Costs and Income of Sugar.-Beet Production in

Arizona, Based on Expected 20-Ton Yield Per Acre.

COSTS OF PIWUCTION

CO4E

Per Acre

(20-Ton Yield)

,

Per Acre Per

Items

(O-on Yield)

Ton

Land Preparation - Labor & Field Power

Subsoil, disc 3 times, float, border, pre-irrigate, knock out border, land plane

Cultural Labor & Field Power

Shape and plant bed

Fertilizer

- 3 times

Thin - once

Hoe - 2 times

Cultivate

- 3 times

Irrigate - 12 times

Ditch & irrigation preparation

Apply insecticides

3 times

Miscellaneous

Total Culture

Materials

Irrigation water h acre-feet

1

(260-foot lift)

Seed - 6 lbs.

Fertilizer (160N

- 80P205)

Insecticide

Miscellaneous

Total Materials

Harvesting

Harvest - machine @ $1.25 per ton screened weight

Hauling - $0.85 per ton

Total Harvest

Cash Overhead

General expense ( to harvest)

Miscellaneous (taxes, insurance, depreciation, etc.)

Total Cash Overhead

$ 20.00

2.2

S.00

20.00

6,00

6.00

2,00

LL.Q0

6LL.7

12.00

3J.2

32.00

6.00

2,00

8.12

2.O0

17.00

8.50

5.00

l3O

Total All Costs

BALANCE

Beets

Beet Tops

Conditiona].

payment

$ 231.80

$11.59

10.00

!i9,00

$ 225.67

Total Return $290.80

$6543

.50

2.15

$].h.SIL

In the Salt River Valley Project this cost would be only $20 for L-acre feet.

39

Returns for income items in Table

1 are computed on the following basis:

Returns for the beets ($11.59

per ton) on the basis of a net price of $7.00 per hundred pounds o± sugar,

16.5

per cent sugar content, as it is regulated on the accompanying contract (1956 price was

$7.90

from Holly Sugar Corporation of the Imperial Valley District).

Expected yield is assumed to be 20 tons per acre.

Conditional payments ($0.80 per hundred pounds of sugar) per ton of beets computed on the basis of 92 per cent efficiency of sugar extraction from the sugar beets.

This computation is shown mathematically as follows:

2,000 lbs. with

16.5% sugar content

330 lbs. sugar with l0C efficiency

330 lbs. of sugar with 92% efficiency

303.6 lbs. sugar

303.6

lbs. at $0.80 per cwt. sugar

$2.L5 x 20

$2.1.5

per ton of beetz

$b9.00 per acre

Returns for the beet tops on the basis of $0.50 per ton of beets at a yield of 20 tons would be $10.00 per acre pasture value.

The Importance of Sugar-eet By-Products

Before discussing the importance of sugar-beet by-products for livestock feeding, it may be useful to give a birds-eye

glance of the

iiortance of the livestock industry to the Arizona agricultural income as a whole. Also, attention will be given to the existing methods and conditions tinder which livestock is produced and fed.

l.O

Arizona Livestock and Feeding Situation

Livestock plays a significant role in Arizona farm income.

Farmers receive annually a total of about

95 millions of dollars from livestock and livestock products.

More than one-fourth of the average total cash receipts from farn.ng (crops and livestock) comes from livestock and livestock products.

Table 5 shows the total annual receipts from the livestock industry in comparison with the total annual dollar receipts from farming

(crops and

livestock).

It also shows the annual percentage that livestock receipts are of the total annual cash receipts from farming,

1950-56.

Table

5.

Total Cash Recejpts from Farming (Crops and Livestock),

Cash Receipts From Livestock and

Livestock Products, and

Percentage that Livestock Receipts are of the

Total

Cash

Receipts from Farming, Arizona,

1950-1956.

Year

1950

195].

1953

19514

1955

1956

TOTAL CASH RECEIPTS FROM

Farming

(crops.& livestock)

Livestock and

Livestock Products

(000 dols.)

275,895

278,865

382,195

1415,132

370,1485

337,270

361,21414

(000 dols.)

89,858

914,211

112,195

99,502

92,3014

89,3314

98,178

Livestock

Receipts as a per cent of total farm

Receipts

1

I

I

'

(per cent)

32

314

29

214

25

26

27

Source:

1950-19514:

Agricultural Statistics

1950, 1951, 1952, 1953, and

19514.

U. S. Department of Agriculture, Washington.

1955 and 1956:

Farm Income Situation, U

S. Department of Agriculture, March, 1956 and

March,

1957, respectIvely.

lu

U)

450

TOTAL GASH RECEIPTS FROM FARMING

PERCENTAGE THAT LIVESTOCK RE-

CEIPTS ARE OF TOTAL FARMING

RECEIPTS.

Ui

0

Q300 z lx

250

I IL.

U)

0

<200 z

0 ts4 lx

<0

U-

0400

U) z

0

=:

350

1950

1951

-.

1952 1953 1954

955

1956

YEAR

Ui

0

- 354

0

0

U)

30W

>

20 z z

0

Ui

U)

I-

0

0

0 a-

J

4

I-

0

I-

0

C-) z

U-

0

U)

Iii

U)

Ui

>

J

Figure 2.

Total Cash Receipts from Farming and the Percentage

Which Receipts from Livestock and Livestock Products

Are of the Total in Arizona,

l9O-l956.

Source:

Table

.

I2

Livestock production and feeding fits in well with Arizona farming.

The irrigated valleys of the state are ideal for the economical production of beef and dairy products

With a wide selection of feeds, mild winter climate, and rapidly expanding markets, excellent opportunities exist for fattening beef animals and for dairy production.

Many feeders, both large and small, are using cattle as a market for home-grown feeds.

Feed crops are produced in abundance throughout the year.

High crop yields produce many pounds of beef per acre.

The bulk of the cattle fattened in Arizona are short.fed, i.e., they are on feed from 100 to ]$0 days.

The principal feeds presently used for feeding in Arizona are the following:

Concentrates

Feed grains: barley and grain sorghum

Citrus meal

Cotton seed meal

04) Molasses

Roughage

(1) Cereal hay

(2) A]!alfa hay

(3) Cereal straw

04) Cotton seed hulls

() Silage (there is an increasing use of corn for silage)

The following table shows the typical make-up of three rations used in fattening cattle in Arizona.

b3

Table

6.

Three Typical Rations Used in A Short-fed Feeding

Program in Arizona

Kind of

Feed

Grain

Meal

Molasses

Rulls

Hay

First 20 to

30

(per cent)

28

8

10

2].

33

RATION

Next 30 days

(per cent)

36

8

10

17

29

Last 60 to

70 days

(per cent)

So

8

10

13

19

Source:

Vanvig, Andrew, Cattle Feedin Costs in Arizona, Department of

Agricultural Ecoiiiiii, University of Arizona, Tucson, Report

No. 110, October,

1956, p. 3.

Feed Prices:

Peed prices are not stable.

They fluctuate from year to year d from season to season.

Table 7 shows average feed prices for the 1955-56 feeding season4

Table 7.

Average Feed Prices in Arizona,

1955.-56.

Kind of feed

Grain cotton seed meal molasses hulls hay silage green feed

Dollars per ton

15.

00

60.00

32.00

20.00

25,00

8.50

6.75

Source: Vanvig, Andrew, Cattle Feeding Costs in Arizona, Department of

Agricultural Economics, University of Arizona, Tucson, Report

No. ]1.O, October,

1956, p. 1.

lh

"Approximately

5 to 60 per cent of the rations used in cattle feeding in Arizona were concentrate type feeds, and )-i.O

to

1 per cent were roughage type feeds."1

Feed accounts for approximately 8 per cent of the total cost of the gain of cattle.2

Therefore, careful attention should be given to the economical selection of the ration constituents in such a to the inaxiniwu possible gain and production with the least possible cost.

Sugar-Beet By-Products as Feed for Livestock

Sugar-beets are often called two crops in one, because the byproducts on the farm and in the factory have significant values in excess of cost as feeds for livestock.

The establishment of a possible sugar-beet industry in Arizona would make the feeding of beef and dairy stock, and of hogs and sheep, with the beet tops in the field and the extracted sugar-beet pulp, an industry of much importance, In the neighborhood of a factory, this supply of beet by-products would be a valuable addition to the stock-feeding resources of, for instance, the Salt River Valley, and would give additional impetus to what is already one of the most profitable industries of that region.

Sugar-beet by-products come from two phases of the industry.

First, the growing and harvesting of the beets yield the crown and leafy

1

Vanvig, Andrew, Cattle Feeding Costs in Arizona, Department of

Agricultural conomics, University of Arizona, Tucson, Report No.

ThO,

October, l96, p. 1.

2

ThId., p. 1.

14S tops, and, second, the extraction of sugar from the beet root yields beet pulp and. molasses,

Without reference to sugar, the vegetable portion of the sugar beet is important in its own right.

Ever since the first beet was sliced, the feeding of those by-products to cattle and sheep has been an integral part of the whole beet sugar econony-.

"Many thousands of sheep and cattle from the ranges of the Western states are nnuaUy fattened in the feedlots of the sugar-beet regions.

The rise of livestock feeding has been coincident with the expansion in sugar-beet culture."1

The beet tops and crown, left after the harvesting operation, are utilized for livestock feeding.

They are an excellent protein and fattening feed if used proirtptly or silaged.

"The feeding value of tops from an acre of beets is equivalent to one ton of alfalfa hay."2 This is an excellent feeding alternative for the livestock feeder, bearing in mind that the. cost of one ton of alfalfa hay is about whereas its equivalent in feeding value, the tops from one acre of sugar beets, costs only about l0.

The value of beet tops are normally figured at

.50 per ton or for a 20-ton yield of beets equals

4io

per acre.

Since few growers may own livestock, they generally rent the fields for pasturing.

Returns may be based on a per head basis, or on the basis of the tonnage yield of beets.

Outright sale of the tops to the dairymen and livestock men for silaging is increasing.

1

"The Sugar-Beet Industry in the Twelfth Federal Reserve District," supplemented to Monthly Review, Federal Reserve Bank of San Francisco,

April, 191, p. 7.

2

Loc. cit.

1L6

Beet pulp is also used almost entirely as a livestock feed, in wet, pressed, or dried form. Wet pulp direct from the processing plant comprises an excellent, bulky, succulent, carbohydrate feed.

Pulp is usually at a cost considerably below the cost of comparable feeds?

Since wet pulp is a bulky product, most factories sell it to livestock feeders in the immediate vicinity of the plant.

Part of the pulp that is not constimed wet is pressed to remove part of the moisture, but most of it is dried.

In the dried form. it is widely distributed throughout the United States and is especially well-fitted to the ration of dairy cows.

Beet molasses, as a carbohydrate concentrate, is conmionJ.y mixed with beet pulp or alfalfa hay.

In addition to its nutrient value, it adds palatability to the entire ration.

This palatability-adding characteristic of molasses feeding in the ration is very important in Arizona in order to make the best use of roughages, especially the unpalatable ones.

There has been shown that tiprolonged feecUng of a heavy grain ration is not required.

More roughage feeding is required.

lxi beef cattle feeding choice cattle, weighing 1,000 pounds or less, can be produced with relatively high roughage rations.tt2

The present cost of molasses, $32 per ton in Arizona, is much less than the cost of the amount of cereal grains which it will replace.3

See Thble 8, this thesis.

2

Lane, Albert N., Cattle Feeding in Arizona, Agricultural Extension Circ. No. 131, University of Arizona, Tucson, March, 19, p.

]S.

See Table 8, this thesis.

Relative Costs of Net Fattenjn Units in SugarBeet

Their Comparison With Common Feeds

Products and.

There can be a very great difference in the cost of the same amount of net fattening value in different feeds.

This difference can often mean a substantial saving in fattening costs to the one who will study these conaratjve fattening values and net fattening costs of the different feeds available to him, as was shown in Table 8.

The most successful fattening operations in any area are those that take fullest advantage of all low-cost fattening feeds produced on the farm.

In the beet belt such feeds are represented by beet tops, beet puips, alfalfa hay, and silage.

A certain amount of concentrated feed such as grain, or cotton seed meal, is usually needed to produce a satisfactory market finish on most classes of livestock, but the aim of the practical feeder should always be to keep that amount as low as is consistent with good practice in taking advantage of the fattening qualities in his roughage and by-product supply.

For the purpose of sinlification, the term "net fattening unit" has been used in place of "total digestible nutrient" to designate the pounds of net fattening value contained in feeds concerned.

The feed cost per ton may vary from time to time.

Maynard1 uses the following procedure to calculate the relative cost of net fattening units in our feeds, "Just list today's feed prices per ton in column (1), then divide column (1) by colum (2) and multiply the result by 100 to secure figure for column (3)." This table serves as a guide for the selection of economical feeds and demonstrates the high relative fattening

Maynard, E. J., Beet and Neat, New Revised Edition, 19.50, ver, Colorado, p. 17.

Den-

118 values of beet by-products,

It

also helps

to show advantages in using the greatest possible proportion of low net cost fattening feeds when

sufficient

protein is

available in

the ration to take care of growth requirements.

Table below shows the relative cost per hiiñded pounds of net fattening

units

for common Arizona feeds at current prices.

Table

8.

The Relative Cost of Net Fattening in Common Feeds.

Kind of feed

Alfalfa hay

Corn silage

Wheat

Barley

Corn

Oats

Cotton seed meal

Grain sorghum

Beet tops (per ton of beets)

Beet pulp (dry)

Molasses

Assuring the following prices per ton1 lbs. of net1 Relative cost fattening

,per 100 lbs. of

units

per ton ,net fattening units

(dollars)

25.00

50.00

60.00

(pounds)

1,006

362

1,600

1,55)4

1,602

1,528

1,500

1,602

(dollars)

2.50

3

20

11.00

3

10

.50

29.00

32.

112

1,8)48

1,212

.145

1,50

2.60

Source:

Maynard, E. J., Consultant for the Great Western Sugar Company,

Beet and Meat, New Revised Edition, 1950, Denver, Colorado, p. 17.

Founds of net fattening units per ton of feed shown in this table are based on Morrison's figures per total digestible nutrients, except for beet by-products where the figures shown are based on the net fattenlug units values of the amounts of grain and hay that have actually been replaced by beet by-products as reported in 106 feeding tests conducted at six Western state and federal experiment stations.

2

32.00 is a price for imported molasses. With the development of the industry in Arizona, however, molasses costs would probably be lower.

149

A nwnber of experiments have been conducted with regard to feed value of sugar-beet by-products in terms of grains and hay replaced.

Maynard1 made a survey of aU feeding experiments conducted at six state and federal agricultural experiment stations during 19143 to secure an over-aU picture of the value of beet by-products in terms of corn or alfalfa hay.

The results of this survey, covering 106 separate tests in which beet by-products had been fed with grain and alfalfa hay, showed that in terms of net fattening units saved by the by-products from a ton of beets, tops replaced 1143.2

pounds of corn or 226.8 pounds of alfalfa; wet pulp replaced 88.7 pounds of corn or 1142.2 pounds of alfalfa, and dried pulp replaced 1014.2 pounds of corn or 167 pounds of alfalfa. Based on a l3 ton average acre yield of beets, this survey showed that tops replaced

314.7

bushels of corn or

i.14

tons of alfalfa, wet pulp replaced 21.14

bushels of corn or

.96

tons of alfalfa hay, and dried pulp replaced 2S.l

bushels of corn or 1.13 tons of alfalfa hay.2

Thid., appendix p. 1.

2

Loc. cit.

CHAPTER ISI

FACTORY REQUIREMENTS AND THE QUALIFICATIONS OF ARIZONA

TO MEET THESE REQUIREMENTS

From the preceding two chapters it has been shown that sugar beets of good quality and in paying quantity can be grown profitab),y in the Salt River Valley of Arizona,

However, this still by no means solves the problem of the establishment of a beet-sugar factory.

Production of sugar beets for sugar in the Salt River Valley for any substantial acreage means a new factory here.

Modern sugar factories and equipment represents an investment of fifteen million dollars or more and the present sugar companies are reluctant to build new factories in the face of quotas.

It would not be practica].to ship large quantities of beets to the Imperial Valley or other California plants due to freight costs.

Also, at the present time such factories can get more than the needed acreages locally.

The full use of the sugar beets would be impossible and unprofitable unless a factory would be erected locally.

For example, the utilization of the factory beet by.-products would be impossible unless a factory were erected in the Salt River Valley.

Up to now in our discussion the problems associated with the establishment of a beet-sugar factory have not been considered.

For a factory requires not onLy a suitable supply of beets produced from a

Sb

51 planted allotment of 18,000-19,000 acres but also an abundance of good water, pure limestone, and cheap fuel, as wel]. as favorable commercial conditions, including a convenient market for the product, good railroad facilities, and opportunity to utilize the pulp in stock-feeding.

Expecting, therefore, that success in growing beets would lead to further inquiry concerning the water, limestone, and fuel supply, certain information is given below on these features of the problem.

These requirements for a factory in Arizona are to be considered,

Factory Requirements

Water Supply

McClatchie and Forbes cU.scuss the need for an adequate supply of water as follows:

'The importance of an abundant supply of suitable water will be recognized when it is stated that a factory using

350 tons of beets a day, requires no less than two million gallons of water every twenty-four hours, or, in other words, an amount sufficient to cover an acre to a depth of about six feet.

Most of this quantity is required for washing the beets and need only be reasonably pure.

Common ditch water will answer, and a sufficient amount could easily be supplies from any of the large canals in the Salt River Valley, An unfailing supply would be essential during the manufacturing season -- a requirement that would limit the location to points on canals having a constant flow.

Water used for washing the beets would not be sacrificed, as it could be used subsequently for irrigation.

The water, however, that is used in the diffusion batteries of the factory for the extraction of sugar from

In a reply from chief agriculturalist of Holly Sugar Company sugar factory, ]3rawley, Imperial Valley, California., May,

1957.

the sliced beets must be of a certain degree of purity, for the reason that some of the salts corninon- dissolved in water prevent considerable amounts of sugar frorui crystallizing during the process of manufacture,

The cost of manufacture is also increased by the presence of calcium and magnesium carbonates and calcium sulphate in the diffusion water, for the reason that when the latter is heated these salts are deposited upon the sliced beets and the interior surface of the batteries, thus render..

ing the extraction of sugar more difficult and decreasing the evaporating power of the apparatus. The amount of salts in solution that can be tolerated in diffusion water varies, according to other factory conditions, since this is but one of a combination of factors that influence the cost of manufactured sugar

Li

In the Holly Sugar Factory in the Imperial VJJey, the water used is not entirely pure, but still successful.

With these requirements in mind, a survey for suitable diffusion water in the Salt River Valley should be done in response to the goal of our study.

It should be remembered, in this connection, that such a survey f or suitable diffusion water in the Salt River Valley was begun in 1898.

This was to find the best location for a sugar-beet factory, with a suitable diffusion water supply.

The results of the survey made was that there were some samples considered within the requirements, and some samples contained excessive and enormous quantities of dissolved salts, and could haxdy be made valuable for factory purposes.

However, a location with suitable diffusion water was found in Glendale and a factory

1

McClatchie, Alfred J. and Robert H. Forbes, Sugar Beet Eerimerits during 1898, Arizona Agricultural Lxperment Station Bul. No, 30, iJniversity of Arizona, Tucson, January, 1898,

p. 2)5.

was erected in l9O.l

This means there is the possibility of finding a location with suitable diffusion water for erecting a factory in the Salt

River Valley.

However, further survey and sampling should be carried on to find the best location with the suitable diffusion water.

The surface water is the same quality in all locations.

Only the pump water varies in different locations.

According to the Salt River

Valley Water Association pump water records, now, the Peoria area or Glendale would probably be the best location for salt-free water.2

The right to the use of surface water of the Salt River Project belongs to the lands of the Project, as aU the waters of the Salt and Verde Rivers have been appropriated for the irrigation of these lands.

1tThe only way to acquire a Water Right to surface water in this project is to acquire the land which has the Water Right."3

Limestone

With reference to limestone, McCJ.atchie and Forbes make the following statements.

"Limestone is used in removing impurities from the

1

This factory lived only a fe years.

Sugar beets were processed at this factory for seven or eight seasons.

In 1920 it was moved to

Delta, Colorado.

It is understood that the important factor in the discontinuance nd failure of this factory was that the sugar-beet crop could not compete with the other crops at that time.

2

Based on a reply from the secretary of the Salt River Valley

Water Users Association.

ioc.. cit.

S1i diffusion juices.

Accordingly, it is important that it shall contain the smallest amounts of those soluble salts that we have seen to be objectionable in diffusion water.

In addition to this, the lime rock should contain but small amounts of silica and moisture, because those constituents affect the facility with which it is converted into lime."1

The required quality of the limestone can be obtained for the proposed factory within a distance much closer than that from which limestone is obtained for the Holly Sugar Factory in the Imperial Valley, which gets limestone from Nevada, a distance of Loo miles. A good quality and quantity of limestone could be obtained from either Snyder Hill, which is 10 miles west of Tucson on Ajo Road, or from Superior which is provided with good highways and a railroad.

Fuel

The fuel qi.testion is fortunately not a serious one as it was before.

The natural gas pipe lines are available in the Phoenix area and Glendale, which in all probability might be a place for the proposed factory.

Labor

A factory needs about 250 to

3()()2 employees in order to fulfill the various different necessary works.

Labor would not be a problem in

Arizona, and would be relativeay cheap because of Mexicans and Indians.

1

McClatchie, Loc. cit.

2

The number of workers in the Holly Sugar Factory, In Imperial

Valley, is 270 workers.

Market

Arizona Market:

Apparently, there is a good and wide market for the sugar to be refined from a possible factory in Arizona.

Arizona itself is an excellent home market.

As indicated in Table 9, Arizona iiiorted 88.

million pounds of sugar for consumption in

1951L, costing 88.8 million dollars.

The market for sugar in both the United States as a whole and

Arizona as a part is certainLy promising because of the continuous increase in population and thus the continuous increase in total sugar consumption, accompanied by a gradual national policy, as shown in Chapter

I, to strengthen local sugar production in the United States.

The present sugar quota and acreage allotment is nothing more than a teiiorary effort to balance the sugar market in both the United States and the world as a whole.

Table

9 shows the estimated quantity of sugar consumed and the prices paid for sugar in Arizona and gives an indication of the importance of the home sugar market in Arizona.

56

Table 9.

Sugar Consumption and Total Amount Spent for Sugar

in Arizona, l97-l951.

lear

1914.7

191i.8

19149 l90

19S1

192

l93 l9b

Total Consumption1

(millions of pounds)

61.812

63.963

7.L1.73

75.0147

72 .890

82.086

86.271

88.31

Total Cost2

(millions of dollars)

59,660

60,120

614,100

75,780

75,080

814,550

91,1450

88,760

Source:

Agricultural Statistics,

1955,

U. S. Department ol' Agriculture.

1

Total consumption for each per capita consumption and each year.

year is estimated by taking United States multiplying by population of Arizona of

2

Total cost is on the basis of U. S. average retail prices multiplied by the total consumption.

United States Market:

The United States is the largest sugar consuming nation in the world.

Its annual consumption, as shown in Table 10, is presently at the rate of approximately

8,350,000

short tons.

This is about

20 per cent of the world's production.

At present price levels, the sugar bill of the nation is well over one and a quarter billion dollars per annum.

It is interesting to note that, in normal times, the per capita consumption of the United States has been one of the highest in the world.

Generally speaking, for many years, excepting for the recent war period when rationing was in effect, the American consumer has used an average of more than

95 pounds of refined sugar per year.

57

The United States produces locafl, about 25 per cent of the total consumption.

The rest of the required sugar for consumption is imported from foreign sources and United States territory?

Table 10 shows the sugar situation in the United States from 19147-l95.

Table 10.

Sugar Cane and Sugar Beets:

Receipts from Foreign

Sources and Territories, Local Production, Total and

Per Capita Consumption, United States,

19)..7-195L..

19l7

19L8

l919

1950

1951

1952

1953

195h

Year

Receipts From

Foreign sources

(000 tons

Territories

(000 tons)

t,217

3,320

3,809

3,783

3,725

3,897

3,881

3,799

1,812

1,733

1,893

2,173

1,918

2, 00

2, 2I9

2,097

Local

Production

(coo tons

2,160

1,921

2,11)t

2,lj.66

2,Oli.2

2,102

2,375

2,610

Total

Consumption

(coo tons

8,189

6,97b

7,816

8, 1j22

7,685

8,003

8,505

8,506

Per Capita

Consumption

(pounds)

9L 2

92.7

9b.5

99 .t

92.5

96.8

96.5

95.1.

Source:

Agricultural Statistics, ture, Washington,

p 79.

1955,

U. S. Department of Agricul-

Another noteworthy thing which should be mentioned here is the future importance of sugar beets and their role in the United Statets sugar industry.

This is noticed in the great increase in acreage

1

This quantity of sugar which is produced locally and imported from foreign sources and United States territories is according to a special quota determined by the Secretary of Agriculture and will be treated later in detail in Chapter IV.

58 allotments of sugar beets from 1955 to

1957.

Table 12 in

Chapter V shows the allocation of the national acreage and state limitation for

1955,

1956, and 1957.

The 1956 allotment was

35 thousand acres above that of

1955, and the allotment was increased an additional

65 thousand acres in

1957 above that of 1956.

Also, it is decided, as far as sugar quota and

consuntion

are concerned, that 55 per

cent of any

additional consumption

above 8,350,000

short tons would be from domestic sugar producing areas of which

51.5 per

cent is devoted to the domestic beet sugar areas.1 The above statements would seem to indicate an expanding market for beet sugar in the United States.

However, although the signs f or market expandsion for sugar appear favorable, in the United States, much of what happens to the local sugar industry will depend on the agricultural and foreign policy of the United States government.

Further details about the United States' sugar industry are discussed

in

Chapter V, dealing with the Sugar Quota and acreage allotments.

Who

Build the Factory for A Sugar Industry in Arizona

The possibility of' an adequate supp]r of raw materials (sugar-

beet roots),

the relative profitability of the crop to

the farmers,

and the availability of essential factory requirements, determined in the preceding chapters, still

do not

solve the problem. We still have the

Sugar Act of 1968, U. S. Department of Agriculture, Comniodity

Stabilization Service,

Sugar Division, June,

1956, p. 5.

important question of who is going

to

establish and finance it.

There are two major considerations, among others, in erecting a factory.

These are:

1.

The possibility of resistance reactions from the sugar-beet companies.

This might

be due to two main reasons.

Their belief that the production of sugar beets for sugar might overthrow, or at least compete with their beet seed industry.

However, beet seed producers have actually obtained a good income from beet seed production, and it appears that a sufficient number would continue to produce enough to meet sugar-beet seed requirements.

According to a statement made by Cnn Hills1

in a

special personal interview with him, there are insect and disease problems associated with sugar-beet production in the Salt River Valley, especially curly top and virus yellow.

He stated that sugar companies might resist a movement of sugar production into their sugarbeet seed producing areas because of the likelihood that sugar beets being in the ground the year around would tend to spread and hold over the diseases and insects that go with the crop.

Hills, Onin, Entomologist of the U. S. Department of Agriculture, Phoenix, has been in the Salt River Valley working on sugar..beet

insects and diseases since 1938.

He stated, however, that the insect problem is a common problem in all the sugar-beet localities.

60

2.

Modern sugar factories and equipment cost about fifteen million dollars, and the present sugar cozanies are reluctant to build factories in new areas in the face of quotas.

One possibility, however, would be for the growers themselves to build their own factory.

This problem of erecting a factory for a sugar industry in

Arizona, however, must be left to the interested individuals and responsible groups in the state.

The problems of the quota and the acreage allotment for sugarbeet culture and the sugar industry will be discussed in Chapter V.

CHAPTER V

SUGAR QUOTA MD ACREA.GE ALLOTitEffE

In view of the iiortance of sugar-beet quotas in

the domestic

sugar-beet industry, it is desirable to include in this chapter a brief historical sketch of the government Sugar Acts and the conditions which led to the development of such a policy.

Conditions Leaking to Sugar Acts

The Sugar Act of l9I8, which is presently a major factor in the

United States sugar picture, will be discussed in detail later in this chapter. But it is important, before getting

into

that detail, to understand that this Act and its predecessors, the Jones-Costigan Act of

1931i.

and the Sugar Act of

1937, together with its amendments, substantially replaced the tariff system which was prevailing in the protection of the sugar producing areas favored by the United States. CottreU states:

The Jones-Costigan Act of l931 was a revolutionary step in the control of sugar from the standpoint of inortation, marketing, price influences, and the like. While the tariff syBtem on sugar was used as a revenue producer for the United States Treasury, it more importantly was designed for protection of the domestic industry."1 it is of interest to touch upon the conditions which brought about this departure through the enactment of the Sugar Acts of

l931, 1937,

and 191i.8.

1

Cottrell, H. H., Beet Sugar Economics, The Caston Printers, Ltd.,

Caldwell, Idaho,

1952, p.

61

62

Cottrefl reviews this as follows:

"As the world began to recover from the ravages of

World War I, the sugar industry the world over began slowly to rebuild itself.

Naturally, after the

First World War, the people of the iorld were sugarhungry, for in most countries, including the United

States, rationing, in various degrees, existed during the war period and for some little time thereafter.

Furthermore, much of the sugar production in continental Europe was destroyed by war, particularly in

France.

In 1919, when sugar was decontrolled by the United

States and by her European allies, the immediate demand was greater than the immediate supply and the price of sugar skyrocketed very sharply.

Such an incentive, pricewise, naturally gave so great an impetus to the production of sugar and the creation of new facilities that, in a relatively short space of time, the world had more sugar than it could consume,

While the United States tariff system was effective in preventi g 'unfavored' sugar from coming into the United States, still it did not prevent the keenest kind of competition during this period of overproduction and intensive xirkettng pressure amongst the areas favored.

The domestic beet and.

cane-sugar growers and processors were suffering from unprofitable returns for their labors.

Many domestic beet and cane producers ware on the verge of bankruptcy."1

The Sugar Acts of 1931i., 1937, and l9I.8

As a result of the situation just described, the administration in

Washington became concerned and felt that something had to be done. As a consequence, the United States government came into the picture in l931.

to correct the situation.

The Congress thus passed the Jones-Costigan

1

Ibid., p.

268.

63

Act of ].93L..

This Act, an amenthnent to the Agricultural Adjustment Acts contained six principal instruments for dealing with the sugar problem.1

These were:

"1.

The determination each year of the quantity of sugar needed to supply the nation's requirements at prices reasonable to consumers andfair to producers.

The division of

the United States sugar market among the domestic and foreign supply areas by the use of quotas.

Li..

The adjustment of production in each area to the established quotas.

.

The levying of a tax on the processing of sugar beets and sugar cane, the proceeds of which are to be used to make payments to producers to compensate them for crop curtailment and adjusting their production to marketing quotas and to augment their income.

6.

The equitable

division of sugar

returns among beet and cane processors, growers, and farm workers."1

This Act had improved conditions

in

the sugar

industry

of the

United States, its possessions, and Cttha.

Prices had inproved and domestic sugar producers as a whole welcomed the change. As to the duration of the Act,

The allotment of these quotas among the various pro-.

cessors in each area,

"The Act remained unchanged until

1936, when the Supreme Court ruled that a tax on processors of agricultural conmiodities was unconstitutional when used as a device to control production.

In view of this decision,

Congress repealed the provisions of the Act permitting the imposition of processing taxes and the

1 s Department of Agriculture, The United States Sugar Program,

Production & Marketing Administration, Agricultural Iflformation

Bulletin

No. 111, July, 19S3, p. 8.

6)4 making of production control contracts between the

Government and growers.

But the quota and allotment system remained in effect.

The repeal of the processing tax and payment provisions of the Jones-C ostigan Act of 193)4 was considered crippling to the sugar program by the government and others interested in the program because it removed the incentive to growers for holding production in line with quota.

Therefore, the government favored an enactment embodying, in general, the principles of the earlier legislation of 193)4.

This resulted in the enactment of the Sugar Act of 1937.

To meet the objections of the Supreme Court to the old processing tax, the new excise tax was not related to government payments to growers.

The new

Act of 1937 authorized the Secretary of Agriculture to make such payments out of the treasury from funds appropriated for this purpose.

The Sugar Act of 1937 was originally scheduled to expire in 19)40.

However, it was extended to 19)41, then from 19)41 to l9)4, from 19)4)4 to 19)46, and again to December of 19)47.

Sugar

:2.t 2.

19)48

The Sugar Act of 19)48 superseded the 1937 Act and extended the sugar program through December 1952, and then to 1956, and it is still active.

The primary objective of the Sugar Act of 1914.8 is to regulate the stabilization of the domestic sugar-producing, refining, and i]lqortjug sugar industries, This over-all objective should be effectuated through the establishment and use of quotas under which the United States market would be divided among the various domestic sugar-producing areas and certain foreign sugar-producing areas which have historically supplied the domestic market.

1 loc. cit.

6

The purpose of the Act is uto regulate commerce among the several states, with the territories and possessions of the United States, and the foreign countries to protect the welfare of consumers of sugar and to promote the export trade of the United States, and for other purposes."1

As to the objectives of the Sugar Act of

19!i.8,

"The new legislation of 1968 did not change the basic objectives of the Sugar Act of 1937 but it did change the method of establishing quotas.

In the

1937 Act, a fixed percentage of the estimated requirements was assigned to each domestic and foreign area.

The Sugar

Act of 19)48, however, assigned fixed quantities to domestic areas and the Philippines and variable quotas to Cuba and tother foreign countries' by distributing the balance of the United States requirements to these countries on a percentage basis.

This gave th benefit of our increased consumption largely to Cuba."

The present Act, the Sugar Act of 19)48, therefore, is essentially the same as the two acts in general.

It consists of three basic features which have shaped the sugar production and consumption policy in the

United States.

These three features are the following:

The Sugar Quota

Title II of the Sugar Act of

191.i.8,

"quota provisions", requires the

Secretary of Agriculture to determine how much sugar will be needed to meet United States requirements during each calendar year.

"In making such determinations, the Secretary shall use as a basis the quantity of direct-consumption sugar distributed for consumption, as indicated by

1 u, S. Department of Agriculture, Sugar Act of l91t8, Comodity

Stabilization Service, Sugar Division,

June, 196, p. 1.

2

The United States Sugar Program, g. cit., p.

9.

66 official statistics ol' the Department 01' Agriculture, during the twelve-month period ending October 31 next preceding the calendar year for which the determination is being made.

Then, after making such initial estimate, the Secretary must make allowances for deficiencies or surpluses in the nationt a sugar inventories and for changes in consuiition caused by changes in population and demand conditions."1 when the Secretary has arrived at a tentative figure, using the standards outlined above, he must then consider the price that this quantity of sugar would likely bring on a wholesale refined basis,

If the estimated sugar price win be excessive to consumers or too low to protect the welfare of the domestic industry, the Secretary is authorized to increase or decrease the determination of the quantity of sugar that may be marketed to achieve a reasonable price,

Since the World War II, the Secretary has started holding a public hearing each year at which all interested persons -- consumers, industrial users, wholesalers, producers, refiners, beet processors -- would present their views on the matter.

The date for this meeting is usually in November of each year, a few weeks before the consumption determination in December. Written statements can also be sthmitted for the Secretary's consideration.

The Secretary must also determine requirements for local consuniption in Hawaii and Puerto Rico, as well as for the United States mainland, so that the general price and marketing objectives will be the sane in all

American markets.

1

Sugar Act of 19)48, 2' 2!.'

.

b.

67

The different sou.rces of suggar supply, naane],y, the mainland beet areas, the mainland cane areas, Puerto Rico, Hawaii, the Virgin Islands, the Philippines, Cuba, and full duty countries, are each allotted a specific share of the total amount determined as required,

The first five areas are allotted a total of )4j1)Øf million tons,

Apportioning this quantity of sugar for the domestic sugar-producing areas is as foflows:1

Area

Domestic beet sugar

Mainland cane sugar

Hawaii

Puerto Rico

Virgin Islands

Total

Short tons (raw valued

1,800,000

500,000

1,052,000

1,080,000

12,000

L.,h)J,,Oo0

As stated under the proration of quota of Section 202 (a) (2) of the Sugar Act, to the above total of Li.,hiih,000 short tons, raw value, there shall be added an amount equal to 55 per centum of the amount by which the Secretary's determination of requirements of consumers in the continental United States for the calendar year exceed 8,350,000 short tons, raw value.

Such addition&1 amount shall be apportioned among and added to the quotas of domestic sugar producing areas (Li.,11th,O00 tons), respectively as follows:

1

Ibid., Sec. 202 (a) (1), p. )4,

68

The first one hundred sixty-five thousand short tons, raw value, or any part thereof, by which quotas for the domestic areas are so increased shall be apportioned

5L.5

per centum to the domestic beet sugar area and

LiEL5 per centum to the mainland cane sugar area.

The next twenty thousand short tons, raw value, or any part thereof, by which such quotas are so increased shall be apportioned to Puerto Rico.

The next three thousand short tons, raw value, or any part thereof, by which such quotas are so increased shall be apportioned to the Virgin Islands,

(ID)

Any additional amount shall be apportioned on the basis of the quotas established for the domestic sugar produc ng areas as adjusted by (A), (B), and (C) above.

For the Republic of the Philippines, in the amount of 952 thousand short tons of sugar, as specified in Section 211 of the Philippine Trade

Act of 191L6.

For the calendar year

1956, the foreign countries other than the

Republic of the Philippines, by prorating among such countries an amount of sugar, raw value equal to the amount determined pursuant to Sec 201 of the Sugar Act, the Secretarys determinations of the continental United

States requirement of sugar, less the stun of the quotas established persu-.

ant to subsections (d) and

(b) of Section 202 of the Sugar Act, which were mentioned earlier, on the following basis:

69

C ourttry

Cuba

Foreign countries other than

Philippines

Per Centum

96

24

For the calendar year

1957 and for each subsequent calendar year for foreign countries other than the Republic of the Philippines, (A) by prorating to Cuba

96 per cent and to other foreign countries

24 per cent of the amount of sugar, raw value, by which 8,350,000 short tons, raw value, and the quota established pursuant to subsection (b) of Section

202, for the Republic of the Philippines, an amount of 952,000 short tons of sugar, and (B) by prorating

245 per cent of the amount of sugar, raw value, by which the amount determined persuant to Section 201, Secretary' a determination of the required sugar for the continental United States for each ca1enclr year, exceeds the sum of 8,350,000 short tons, raw value, as follows?

Per Cent

Country

Cuba

Peru

Dominican Republic

Mexico

Other countries

29.59

24.33

14.95

5.10

1.03

Furthermore, the Sugar Act ol' 19248 provides that

",whenever in any year any foreign country with a quota or proration thereof of more than 10,000 short tons fails to fill such quota or proration by more

1

Ibid., Sec. 202, a(2), (b), (c) 1 and 2, pp,

5 and

6,

70 than 10 per cent and at any time during such year the world price of sugar exceeds the domestic price, the quota or proration thereof for such country for subsequent year shall be reduced by an amount equal to the amount by which such country failed to fill its quota or proration thereof, unless the Secretary finds that such failure was due to crop disaster or finds that such reduction would be contrary to the objectives of the Act."1

And, finally, one noteworthy thing should be mentioned as far as readjustment is concerned, that deficiencies from domestic areas are reallocated to other domestic areas and to Cuba, and a Philippine def 1cit is assigned to Cuba.

It is not within the scope of this thesis to deal in any more detail with the vast subject of markets and the marketing of sugar.

It is important, however, to recognize that, in sugar marketing, there is not any insulated or isolated sugar area in the world.

Payments to Growers

A second basic feature of the Sugar Act of 1968 (sugar quota was first) is payments to growers.

"Regulation of the sugar market through the quota system is supplemented by a system of conditional or benefit payments by the government to continental and jii1r producers.

These payments are conditioned upon the producer's meeting several requirernents: employing no child labor; paying fami laborers in full and at wage rates not less than those determined by the Secretary of Agriculture; and finally, observance of the specific allotments if they have been assigned.

1

Ibid., Sec. 202 (e), p.

7.

71

"The rate of payment is based on the amount of raw sugar commercially recoverable from the production of the farm.

Growers whose crop produces less than

3S0 short tons of raw sugar receive 80 cents per

100 pounds; larger growers receive payments on descending scales; reaching a mithnun of 30 cents per 100 pounds on any production in excess of 30,000 short tons.

Payment may also be made to growers whose yield is deficient or who must abandon acreage because of adverse weather, disease, or insects."1

Table 11 shows the government payment to the growers from

191i.7

to

1951i.

Table 11.

Sugar Beets, Payments to Growers Per Ton, United

States,

19).7-19S1.

Crop year

19!i.7

191i.8

19L9

190

l91

192 l93

V

I l9Sti.

t

Basis of payment

Net return per

'

-

(dollars

I

6.148

6.61

6.69

6.96

7 27

7.146

7.3)4

7.00

Payment to growers per ton of sugar beets

Abandonment and

Sugar

,

(dollars)

(dollars)

2.1414

2.14)4

2.L7

2,140

2.38

2

37

2 .3

2 32

.10

.161

.07

.08

.08

.06

.014

.10

Source:

Jackson, Donald, B. B. DeLoach, and Rado J. Kinzhuber, Market-

Sugar Beets, U. S. Department of Agriculture, Agricultural

Marketing Service, Marketing Research Division, AMS No. 137,

November, l96, p.

27.

1

Phelps, H. Fisk, "The Sugar Beet Industry in the Twelfth Reserve

District", Supplemented to

Monthly Review, Federal Reserve Bank of San

Francisco, April, 19l, p.

3.

72

Excise Taxes

A third feature of the Sugar Act of l9L.8, which is still active, is excise taxes

In order to provide funds for these subsidiary payments, which are financed out of the general funds of the treasury tt.,.the government imposes either an excise or an import-compensating tax on sugar.

The excise tax is levied on all sugar refined in the United States, whether from imported or domestic raw sugar.

The refined sugar, which is imported into the United

States is subject to an import-compensating tax of the same amount.

This tax is paid in the same manner as a duty.

In effect, the conditional payments to growers compensate for the lower price which the grower receives from the processors as a result of the excise tax placed on the refined sugar sold by the processor.

For the vast majority of the smaller producers, the payments are in excess of the tax.

But the lowering of the scale of payments for the larger producers means that some of the largest receive payments smaller than the tax.

Since producers in foreign countries and Cuba receive no payments, the tax has the same effect as a duty in reducing the net amount received for sugar sold by them in the United States market.

Sugar Beet Acreage Allotment

Restrictive proportionate shares (farm acreage allotment) became effective in the beet sugar area beginning with the

19S5 crop, persuant to the provisions of the Sugar

Act of 191i.8,

Section 302 (b) which states as follows:

'SIn determining the proportionate shares with

1

Loc. cit.

73 respect to a farm, the Secretary of Agriculture may take into consideration the past production on the farm of sugar beets and sugar cane marketed (or processed) within the proportionate share for the extraction of sugar or liquid sugar and the ability to produce such sugar beets or sugar cane, and the Secretary shall, insofar as practicable, protect the interests of new producers and smaU producers and the interests of producers and sinai]. producers and the interests of producers who are cash tenants, share tenants, adherent planters, or share croppers and of the producers in any local producing area whose past production has been adversely, seriously, and generally affected by drought, storm, flood, freeze, disease insects, or other similar abnormal arid uncontrolable conditions."

As a preliminary step, acreage allocations were established by the determination for the various sugar beet producing states primarily on the basis of the acreages of sugar beets planted in the l9SO-l91,.

crop period.

The purpose of assigning specific shares to farms in a particular area is to adjust crop output to the area's quota and carry-over determination and to assure that each farm will share in this adjustment equitably.

Administration of Proportionate Share Program

Each year the Secretary of Agriculture determines a national and state acreage allotment.

The procedure for administration of the proportionate share program is outlined by the Commodity Stabilization Service as follows:

"Then, in each state the Agricultural Stabilization and Conservation State Committee (hereinafter referred to as "State Committee") shall establish individual farm proportionate shares in accordance with the past beet production records in the crop period l9SO-l9I.

In carrying out the proportionate share program within the state, the State Committee may utilize the services of members of the Agricultural Stabilization and Conservation County Committees, and may cooperate with advisory committees consisting of sugar beet growers, representatives of sugar beet grower associations, representatives of sugar beet processors or combinations of these groups.

The State Committee shall formulate these standards and procedures in written forms for establishing proportionate shares within the state in accordance with the past production records of the crop.

Such standards and procedures shall be reviewed by the Director of the Sugar Division,

Commodity Stabilization Service, for conformity and to assure reasonable uniformity between adjoining areas in adjacent states, shall be subject to the approval of the

Director, and shall be availale for public inspection in state and county offices."

Subdivision of State Acreage Allocation

The Commodity Stabilization Service states the following with regard to assigning the acreage allocation within a state:

"Before establishing individual farm proportionate shares, the State Committee may subdivide the state acreage allocation into allotments for areas within the state, such as an area served by a beet sugar company, a county or a group of counties.

In making any such subdivision, appropriate weightings, approved by the Director, shall be given to the past production of sugar beets and the ability to produce sugar.

'Past production' shall be measured by the average planted acreage of the area for not less than

l95O-l95!i, except

that if the State Committee determines that

the

inclusion of one or both of the 195.5 and 1956 crop years would provide a more representative period, one or both of such crop years may be included upon prior approval of the Director.

'Ability' shall be measured by the area' s largest planted acreage during any o±

7b

1

U. s. Department of Agriculture, Commodity Stabilization Service,

Proportionate Shax,

Domestic Beet Sugar Producing Area,

1957 Cr, S. B.

35O. 53, Revised, p.

the crop years used to measure 'past production' or by a combination of planted acreage for any such years.

If the state acreage allocation is not subdivided, proportionate shares will be established directly from such allocation and the state shall be deemed to be one allotment area.

Unused acreage in any area may be realloted by the State Committee among other areas within the state."

Establishment of Individual Proportionate Shares For

Old Operator Farmers

Again, quoting from the Commodity Stabilization Service

"In establishing proportionate shares for individual farms from area allotment, the State Conunittee shall consider the factors of past production of sugar beets and ability to produce sugar beets.

These factors shall be measured by reference to the planted sugar beet acreage record of the farm, the '1956 crop share established for the farm' or if the farm operator is a tenant in an area where sugar beet production is organized around tenant operators rather than around units of land, they may be maasured by reference to the personal planted sugar beet acreage record of the farm operator within the state or allotment area, as specified in procedure formulated by the

State Committee, or they may be measured by a combination of such farm and personal records.

However, in an area where such personal records are utilized, the farm base for each farm whose operator is not a tenant or is a tenant with no such personal record shall be established so].ey from the farm records in the period of crop years used in measuring past production.

In case of death or incapacity of a tenant, his personal sugar beet production record shall be credited to the administrator or executor of his estate or to a member of his family, if in the year of such death or incapacity, or in the following year, such administrator, executor, or family member continues as a tenant the customary sugar beet operation of the deceased or incapacitated tenant.

The term '1956-crop share established for the farm' shall mean either the 1956-crop share

75

Ibid., (h), p. 2.

established for the farm, including adjustments made under appeals but excluding any donward adjustment made because the

1956 crop acreage planted on the farm was less than the share originally established for the farm and any upward adjustment made because the 1956 crop shares of other farina were not fully planted, or the initial 1956 crop share which would have been established, if it had been requested by the farm operator, except as a cer "1

1956 crop new produ-.

Set-Aside Acreage for New Producers, Appeals, and Adjustments

Regarding set-aside acreages for new producers, appeals, and adjustments, the Commodity Stabilization Service states the following:

0Not less than 2 per cent of the state acreage allocation shall be set aside for establishing proportionate shares for farms operated by new producers and not less than 1 per cent shall be set aside for adjustments under appeals. Any acreage required to supplement the acreage available from initial proportionate shares in excess of reuested acreages in making adjustments in initial proportionate shares pursuant to paragraph tjt (mentioned earlier) may also be set aside.

In determining proportionate shares for new producers, the State Committee shal tke into consideration availability and suitability of land, area of available fields, availability of irrigation water

(where irrigation is used), adequacy of drainage, availability of production and marketing facilities and the production experience of the operator.

A farm operator who believes that the proportionate share established for his farm is inequitable, may file a written appeal for reconsideration of such proportionate share of the local Agricultural Stabilization and Conservation County Office, not later

76

1

Thid., (j), p. 2.

77 than the date shown in the notification of proportionate share, as established by a statement of facts constituting the basis for such appeal.

The appeal shall be reviewed in such county office and forwarded with recommendations to the Agricultural Stabilization and Conservation State Office.

The appeal shall be reviewed and acted upon by the State Committee, or in lieu thereof, by a sugar beet appeal committee to be designated by the State Committee and to be composed of three members, including the State Administrative

Officer.

acb of the two other members shall be a state committeeman or an employee of the A .S .0

State

Office. Decision will be made.

If the farm operator is dissatisfied with the decision in his case, he mayappeal in writing to the Director, whose decision shall be final."1

Arizona and Possible Acreagj Allotment

As was stated in preceMrig discussions concerning sugar beet acreage allotments under the Sugar Act of l9L.8, there will be no one state, region, or farm allowed to grow sugar beets, for sugar, without having an acreage allotment.

Accordingly, Arizona cannot raise sugar beets for sugar without an acreage allotment under the existing Act of l9!8.

One question, however, will be raised by interested people who are anxious to get its answer.

Should Arizona be denied forever?

The answer is not easy.

The author's answer to this question, based on this study, is the following:

"No, Arizona should not be denied forever." The facts supporting this decision may be grouped into two major catagories.

1.

As determined in the preceding chapters, Arizona has the qualifications to produce an excellent quality and quantity of sugar

1

Ibid., (g), (j), and (n), p. 2.

78 beets, and to build up a successful industry like her sister, the Ixierial Valley of California.

Accordingly, there is no logical reason why Arizona should not utilize her capital and resources to the best possible uses.

This point is supplemented and supported by the second point which together would build a strong case against denying Arizona the opportunity to attain an acreage allotment.

2. A continuous increase in the national and the state acreage allocation, is indicated in Table 12 since the beginning of the allotment system.

This may indicate the encouraging policy of the United States government to increase domestic sugar production because of the continuous increase in the sugar consuniption by the American people due largely to a continuous increase in population.1

Since all the sugar factories at the present time are almost satisfied with the quantity of sugar beets they need for their industries, an allocation of an acreage large enough to meet the requirements of a factory for Arizona will not be at the expense of the other sugar beet states and factories.

This is because the trend of the national acreage is evidently going upward.

Roughly, 2

States comes from per cent of the sugar consumption in the United mainland sources,

3A to

)4/ of this domestic production is beet sugar, the remainder being cane sugar, as indicated in Table

3,

p. 31, this thesis.

79

Table 12.

The 191i.3-1952, 1953, and 19514

Sugar Beet Crop,

Acreage

Base with National and State Allocations for the

1955,

1956, and 1957

Sugar Beet

Crops for Comparison.

State

Base of Allotment

Average

1913-l952

1953

,

19514

,

Allocation of Acres

1955

,

1956 1957

California

'

1142,500

'

1714,900

'

2214,600

'

182,530 '

192,1141 206,0141

Colorado

'

1143,900

'

121,300

'

151,1400

131,59]. '

137,275

'

1147,053

Idaho flhinois

Indiana

Iowa

Kansas

'

1

75,500

2,210

900

1,500

6,800

'

'

'

82500 '

93,1400 !

80,050

1,1460 ' 2,060

200

'

60

'

V

750

5,600

1,1480

6,800

'

76,600 '

2,007

'

614

1,1485

7,267

Hichigan

Minnesota

V

*

81,100

!

55,700

77,803

Montana

Nebraska

'

V

V

)4..,8o0

' 68,700

76,000 '

67,263

66,700 '

145,300

'

55,500 '

51,2148

V

58,800

V

55,200

V

I

67,500

'

58,816

5()(J

V

Nevada

New Mexio

V

1

520

14140

North Dakota'

21,900 V

36,1400

Ohio

'

22,000 '

15,600

'

Oregon

South Dakotat

19,000

5,600 '

V

'

17,600

5,100

!

V

' l

650

38,200

1,800

16,600

6,600

7614

35,006

20,367 *

17,805

5,1478

F

'

'

Texas

Utah

Washington

'

35,1400

V

28,1400

16,900 '

32,1400

1,300 1

35,800

35,500

V

1,631

30,8114

83,1425

'

2,20].

'

614

1,630

'

7,611

77,803

89,367

1,7146

8,153

83,21414

70,095

'

75,082

53,1406

61,292

525

796

36,1479

21,2214

18,555 '

R

5,709 V

1,699

31,903 2

'

30,813

'

32,110 l

V

V

2,358

68

57,210

65,657

563

853

39,077

22,736

19,877

6,116

1,820

314,897

314,397

Wisconsin

Wyoiting

Reserve

'

1

V

13,300 '

314,200

1

9,800

13,900

35,600 !

39,600 '

V

V

12,1149

314,14145

500 '

I

12,1149

36,208

500 1

1301J4

38,1487

2,500

V

I

V

I

V

Total U. S.

853,630

I

V

792,950 l

963,600

I

V

850,000 I

V

885,000

V

950,000

Source: Data for average 19143-1952, 1953, and 19514 (prior to establishment of allotments): Agricultural Statistics 1955, U. S. Depart.

ment

of Agriculture,

p. 71.

Data for 1955 (the beginning of current acreage allotment system) and 1956:

Holly Agricultural

News, published by Holly Sugar Corporation, Fall, 196, p. L,

Data for 1957:

"Proportionate Shares, Domestic Beet Sugar Producing Area,

1957

Cp," Coimnodity Stabilization Service, U, S.

Departt oflgriculture, S. D. 850.53 Rev., Title 7, January,

1957.

1000

J

500

U,

U

X 900

0

0

(1) 800 z

(I)

700

I.z

I

I-

600

2

U

/

, /

,' /

,,/,

//,/ / ,/,

//, //

// /

/

/

FJ

1943-1952

1953

/

/

/

/, /

,

/ // /

/

/

/,/,//,, //

/// '

///

,//

,/// /,

/

/

/

///,

/

/, '//

/

/,

/

,/,

////

//,,

/

1954

,

/

1955

,

1956

YEAR

I lAA

1957

Figure

3.

Acreage Allocation for Sugar Beets, United States.

1913-1952 Base Allocation and

Annual Allotments,

193-l97.

Source:

Table 12.

80

8].

What Might Be Done To Get Allotment For Arizona

The appropriate procedure to obtain an acreage allotment for Arizona would be the filing of a request for such an allocation with the Director of the Sugar Division, Commodity Stabilization Service, U.

S. Department of Agriculture, on behalf of the farmers who are interested in engaging in sugar beet production.

The request should be accompanied by a statement of facts constituting the basis of such a request.

Obtaining a satisfactory acreage allotment, however, under Arizona special conditions is not a simple one.

This is particularly true, bearing in mind that any allotment less than the minimthn requirements for the economical operation of a sugar factory (about 18 - 19 thousand acres)1 will be use-.

less in accordance with the assumption of the request.

This is because the farmers will not grow sugar beets unless they find a home market for them. A sugar factory in Arizona will provide this home market.

It is not practical for Arizona farmers to ship the possible beets to California, due to freight rates.

Since the possible factory in Arizona requires an allotment of 18-19 thousand acres, much more than the whole national reserve, the most effective way to get the necessary allotment may be through

Arizona' s representative in Washington.

Anyway, the solution of this problem is left to Arizona farmers themselves to follow whatever course they may think proper.

1

The whole national reserve was only 500 acres for

and 2,500

acres for

1957, as indicated in Table 12.

195 and

1956,

CHAPTER IV

SUNMPAI

AND CONCLUSIONS

Sugar beets of good quality and paying quantity are grown successfully in the Imperial Valley of California, an area with soil and climatic conditions similar to the Salt River Valley of Arizona.

The average yield of sugar beets per acre in the Imperial Valley during the past five years has been approximately 20 tons

per acre.

A long period

of years of continuous

research

on sugar beet production at the Mellawland Station, compared to

minor occasional research in Arizona,

may well be the principal factor causing the difference of beet-sugar industry development in Imperial Valley and the Salt

River Valley.

The University of Arizon&s Agricultural Experiment Station has conducted a variety of experiments regarding the possibilities for successful production of sugar beets (for sugar) under Arizona soil and climatic conditions.

Some of these experiments go back as far as

1897, while others are more recent.

The results of ear3y experiments were put in practice, and a sugar factory was established in Glendale,

Arizona in l90.

This factory, however, did not long exist, priznariJy because sugar beets could not compete with cotton (which at that time was not under controls) for the land and capital resources.

Recent experiments (l9!i.8-l95), however, with newer and better adapted vanties and better cultural techniques have given better results than

82

ear]y experiments.

A coiarison of early

and recent experiments in the Salt River Valley, with regard to yield and sugar content is shown below.

83

Early

cperiments

(1897-1899)

Max. yield

per acre sugar content

15.2 tons

13.8

per cent

Recent Experiments (1%5)

Avg yield

per acre sugar content

19.08 tons

17 per cent

Yie1d of as high as 30 tons per acre have been obtained on experimental lots at luma.

2.

With acreage controls on cotton, sugar beets could become a profit-.

able alternative crop in the Salt River

Valley.

Based on recent experimental results in

the

Salt River Valley and considering the yields obtained by the farmers

in the Imperial Valley, a yield of 20

tons per acre can likely be obtained under farm conditions in the Salt

River Valley.

The net return to land and management from an expected yield of 20 tons per acre would be much higher than the net return from the other extensively grown crops, other than cotton, as shown below.

Net returns for each crop are based on estimated 1957

prices

and costs for two water cost conditions:

(1) the Salt River Project and (2) for a pumping lift of 260 feet.

Crop Yield

Price

Cotton

2.0 bale

30#/Ib lint

Alfalfa hay

5.0 tons

*25/ton

G. sorghum

1.8 tons

$50/ton

Barley

1.6

$50/ton

Sugar beets

(for sugar) 20 tons

$lh.51L/ton

(includes value of tops)

*300

125

90

80

291

Gross

Return

Estimated net return to land arid management per acre

Salt River

Project

PtUTL1J

Area

260-ft. lift

$ us

23

$

93

6

25

3].

87

65

3.

Under the existing agricultural situation in Arizona, with the restriction of cotton production, farmers are anxiously seeking a profitable alternative crop to replace cotton in the cotton diverted lands.

The choice of profitable alternatives, however, is limited, in Arizona.

In many cases, producers planted the land taken from cotton to another alternative crop such as alfalfa or grain sorghum, although economic conditions alone might not have justified this decision.

Jt.

Sugar-beet by-products from the farm (beet tops) and from the factory

(pulp and molasses) have proved to be excellent supplements to other feeds such as grains arid hay for livestock feeding.

They are u,'1 ly cheaper than grains with equivalent fattening values.

Sugar-beet by.products would be a valuable addition to the feed resources of Arizona and. would thus give additional inetus to what is already one of the most profitable industries in the Salt River Valley.

85

5.

Arizona has the qualifications to meet the necessary requirements for establishing a beet-sugar factory, namely, water supply, limestone, fuel, labor, and markets, upon which the profitability of the possible sugar-beet production is dependent.

However, as to the question of erecting a factory in the Salt River Valley, there are two major considerations:

(1)

The possibility of resistance reactions from the sugar-beet seed companies.

This night be due to two main reasons:

(a)

Their belief that the production of sugar beets for sugar might overthrow, or at least compete, with their beet seed industry.

However, beet seed

producers have actually

obtained a good income from beet seed production, and it appears that a sufficient number would continue to produce enough to meet sugar-beet seed requirements.

(b)

There are insect and disease problems associated with sugarbeet seed production in the Salt River Valley and the likelihood that sugar beets being in the ground the year around would tend to spread and hold over the diseases and insects that go with the crop.

However, the disease and insect problems are common problems

in

nearly all the sugar-beet localities.

(2)

A modern sugar factory costs about

i5

million, and the present sugar companies are reluctant to build factories in new areas in the face of sugar quotas.

One possibility, however, would be for the sugar-beet growers themselves to build their own factory.

86

This problem of erecting a factory for a sugar industry in Arizona, however, must be left to the interested individuals and respon-

sible groups in the state.

6.

Achieving the desire of Arizona farmers and livestock men to intro-

duce sugar beets into

the agriculture of Arizona as au alternative crop, however, is not possible under the present existing Sugar Act of

l968,

because of the sugar quota and sugar-beet acreage allotment restriction. Arizona is the only one of the U Western

states which

does not have an allotment to grow sugar beets,

Necessary arrangements must be made to get the privilege of sugar-beet production.

A mirthnum of

18-19 thousand acres is required for economical operation of a modern sugar beet factory.

The present frustration of Arizona from the acreage allotment privilege, however,

does not mean

that Arizona should be denied forever.

Since Arizona has the qualifications to make the sugar-beet industry a successful one in this state, there should no longer be any reason why

Arizona

should not produce sugar beets for

sugar.

Consequently, the author would highJ.y recommend the introduction of the

sugar-beet crop

into Arizona agriculture and to build up a sugar indus-

try with its full advantages.

This, however, is more or less a political problem, and the

author would

like to leave its solution to the people of Arizona and their representatives in Congress.

BIBLIOGRAPHY

Books

Cottre].1, H. H., Beet Sugar Economics, Caidwell, Idaho, The Caston Printers, Ltd., 1952

Dalton, John E., Sugar - A Case Study of Government Control, New York,

The Macmillan Company,

1937.

Heady, Earl 0. and Harold H. Jensen, Farm 14gement Economics, Prentice-

Hill, Inc., Englewood Cliffs, l95L.

Malott, Deane W. and Boyce F. Martin, Agicultura1 Industries, McGraw'

Hill Book Company, Inc., New York and London, 1939.

Van Hook, Andrew, gar,

The

Ronald Press Company, New York, 19b9.

U. 5, Department of Agriculture Publications

Agricultural Stabilization and

Conservation Committee, Sugar Program in

California, Berkeley,

California, 191i7, 191i.8, 19Li9, 1950, l951

'1952, 1953, 1951i., and 1955.

Agricultural Statistics, ton.

1950, 1951, 1952, 1953, l951,

and

1955, Washing-

Commodity Stabilization Service, Sugar Division,

Sugar Reports, No. 5Ii,

Washington, October, 1956.

Commodity Stabilization Service, Sugar Division, amended, Washington, June, 1956.

Sugar Act of

-

19l8, as

Commodity Stabilization Service, Sugar Division, Proportionate Shares,

Domestic Beet-Sugar Producg Areas, 1957

Crop, S. D. 850.53,

Rev., Washington, 1957.

Jackson, Donald, D. B.

DeLoach, and Rado J.

Kinzhuber, Agricultural Mar-

Sugar Beets, keting Service, Marketing Research Division, Marketi n

AMS No. 137, Washington, November,

1956.

87

88

Production and Maxketing Administration, The United States Sugar Program,

Agricultural Information Bulletin

11

111, Washingt6n, JuJ.y,

1953.

Publications of Sugar Refiners and Producer's Associations

California Sugar-Beet Growers Association, Ltd., The California Sugar-Beet,

Stockton,

1955.

California Sugar-Beet Growers Association, Ltd., The California Sugar-Beet,

Stockton,

1956.

Holly Sugar Corporation, Holly Agricultural News, Colorado, November, 1956.

Maynard, E. J,, The Great Western Sugar Company, Beets and Meat, Leaves

Press, Colorado, 1950.

Western Beet Sugar Producers, Inc., The United States Beet Sugar Industry,

San Francisco,

1956.

The University of Arizona Publications

Annual Reports of the University of Arizona' a Agricultural ExperIment

Stations, Mesa, for year ending December, 1956.

Annual Reports of the University of Arizona' a

Stations, Yuma, 1918-)4.9, l919-5O, and

Agricultural

Experiment

1950-51.

Barr, G. W., Arizona Agriculture 1957, Arizona Agricultural Experiment

Station, University of Arizona, Tucson, 1957.

Forbes, Robert H.,

Beet Experiments, Arizona Agricultural Experiment

Station, University of Arizona, Tucson, 1897.

Lane, Albert N. and B. B

Stanley, Cattle Feeding in Arizona,

Extension Service Circ. No. 131,University

Agricultural

of Arizona, Tucson,

195!i.

1899, Arizona Agri-

NeC latchie, Alfred J., Sugar Beet Experiments dun 'g cultural Experiment Station Bul. No. 31,

University of Arizona,

Tucson,

1899.

NcClatchie, Alfred J. and Robert H. Forbes, Suar Beet

1897, Arizona Agricultural Experiment eriments During

Station BuL No. 30, Universty of Arizona, Tucson, 1898.

Vanvig, Andrew, Cattle

Feeding Costs in Arizona, Arizona Agricultura.

cperimenStation Report No.

fl10, University of Arizona, Tucson,

October, 1956.

89

University of

CR1 I fornia Publications

Hills, F. J., arid Pear]. Albough, The Value and Use of Sugar-Beet Tops,

Agricultural Extension Service, University of California, Berkeley.

Tinley, J. M.,Economic Factors Affecting The Sugar-Beet ornia Agricultural

Industry, Ci]if..

Extension Service Circular No.

1l3, Berkeley, l92.

1niversity of California

Agricultural Extension

Service, Inerial County,

Saip]

Costs, Cultural Practices, Miscellaneous Information,

Pertaining to Field Crops In Inerial County,

l%6-1957.

Other Publications

Phelps, H. Fisk, The Sugar-Beet Industry In The Twelfth Federal Reserve

District, Supplemented to Monthly view, FederaIReserve Bank of San Francisco, San Francisco, April, 1%]..

o Arizona Ubriy

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