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Sugar beet farmers in Minnesota and North Dakota are hopeful this year's harvest marks a turn for the better. In the past couple of years, sugar prices fell to 20-year lows, turning a cash cow into just another break-even crop.

	Sugar beet farmer Dave Kragness is pleased he'll be in the black after this year's harvest. Sugar prices have dropped to their lowest levels in 20 years, but are showing some signs of rebounding. (MPR Photo/Dan Gunderson)

Sugar beet farmer David Kragnes says he's optimistic, despite a slightly lower than average harvest. Kragness farms a few miles north of Moorhead, and is on the board of directors of American Crystal Sugar.

On a grey fall day, he's in the shop, preparing to put away his harvest equipment for the winter. His sugar beets are in storage. It will be months before they are processed and the sugar sold. American Crystal Sugar will soon tell farmers what price it expects to pay them.

As he settles into a seat across the kitchen table, Kragness says he anticipates black ink this year - and any profit is cause for celebration.

"There's the optimistic farmer in me, wanting to rise up and say, 'OK, you planted a crop last year and you're still in business. The prices are a little better than they were last year, so let's plant another one and keep rolling.'"

Kragness says it's likely the sugar industry has bottomed out, and prices are beginning to rebound. Elsewhere in the country, sugar processing plants have closed, and sugar production nationwide is down this year. Those are positive signs which mean the prices farmers get may go up. But Kragness says ultimately, his fate will be decided by the work of two entities - Congress, who is considering a new farm bill; and trade negotiators, who are working to establish a free trade zone with sugar-producing South American countries.

Kragness says realistically, the days of big profits from sugar beets are over.

	The American Crystal Sugar plant, just outside Moorhead, Minn., processes sugar beets grown by farmers in the northwestern part of the state. It's estimated the sugar beet crop has a $2.5 billion economic impact in Minnesota and North Dakota every year. (MPR Photo/Dan Gunderson)

"I think it can be profitable. I think it can be one of the better crops in the valley. It can be good, but can it be as good as it was? I'm not confident of that. I'm less pessimistic than I was a year ago, however," says Kragness.

Sugar beets are a significant part of the regional economy. North Dakota State University researchers estimate the industry has a $2.5 billion annual economic effect in Minnesota and North Dakota.

Most of the sugar beet production is in the Red River Valley, but sugar beets also play a role in the southern Minnesota farm economy.

Southern Minnesota Beet Sugar Cooperative President and CEO John Richmond says this year's crop was very average. The Southern Minnesota Co-op is coming off two very difficult financial years, but Richmond believes the worst is over.

"This is a commodity business, and it goes through cycles," says Richmond. "When it's good it's really, really good and when it's bad it's really, really bad. I believe we're starting to climb the uphill slope to being on the good days again."

With this year's harvest complete, farmers are beginning to plan for spring planting, anticipating the next crop will be better, and sugar prices will be higher.