The Sugar Beet Folly

In the 1960s, with the passionate support of Senator Ed Muskie, Maine attempted to create a sugar beet industry in Aroostook County. After Muskie secured a deal with the USDA, he partnered with a brash french fry producer to build a processing plant and produce sugar. Starting in 1966, a plant in Easton did manage to produce sugar, but a combination of low yields, competing potato prices, dwindling interest by farmers, and excessive pollution from the plant, caused the whole enterprise to shut down by 1970. It has often been referred to as a “fiasco.”

Sugar Beets

What’s a sugar beet, you ask? Well, it’s not the purple beet you’re used to (that everyone says is good for you). Sugar beets are white, huge, and grown exclusively for the production of sugar. Sugar beets account for about 20% of the total sugar production in the world. The top producers are Russia, Germany, France, and the US. Unlike sugar cane, which accounts for the other 80% of sugar production, sugar beets only grow in colder climates.

Not the First Time

Maine had experimented with a sugar beet crop before. In his 1876 inauguration speech, Governor Selden Connor pushed for the establishment of a sugar beet industry in Maine, citing success in countries such as France and out in California. He stated:

“one of the most important agricultural industries of the world may be introduced into our State, to the great benefit of all classes, mechanics, capitalists and laborers, as well as farmers-the manufacture of sugar from beet roots.”

The Legislature subsequently enacted a law that would pay a state subsidy of one cent per pound on all beet sugar manufactured in Maine.

In 1878, the Maine Beet Sugar Company was formed to take advantage of this potential windfall. The company built a refinery in Portland where beets were to be shipped for processing. They contracted with 1,700 farmers in Southern Maine and another group of farmers near Presque Isle to grow sugar beets. The company built a drying kiln in Presque Isle and dried pulp was then shipped to Portland to be refined. Seed was provided by the company.

First Failure

The Presque Isle operation failed within a year. The farmers delivered 500 tons of beets the first year but the cost of the coal used to dry the beets combined with the high freight charges to ship the dried pulp to Portland was simply too much.

The southern operation lasted only a year longer. Farmers brought in 9,000 pounds of beets but were paid only $5/ton. Farmers were dissatisfied both with their production and the pay rate, and when the company offered the same deal the next year, they didn’t get enough farmers to sign up. The company folded and the machinery was sold.

Let’s Try Again in the 1960s

Northern Maine grows potatoes. But like any industry, it’s good to diversify crops due to inevitable fluctuations in weather, yield, and market pricing.

In 1962, the US cut off sugar imports from Cuba. Needing to find other sources for the needed sugar, they passed the Sugar Act of 1962 which sought to boost domestic sugar production, including both sugar cane and beet sugar.

Also in the early 1960s, potato prices dropped horribly. The Maine Potato Council determined that perhaps sugar beets could be a good hedge crop against potatoes. Sugar beets offered something different from most crops: they were subject to strict national quotas and prices are negotiated by the Sugar Beet Growers Association. So farmers would be guaranteed a stable price at market from year to year.

Enter Senator Muskie

With support from Senator Ed Muskie, the sugar beet idea grew in Maine. The council presented testimony before the USDA Sugar Division in 1962 hoping to secure a prized sugar beet allotment for Maine. The problem was that there wasn’t enough information about the feasibility of growing sugar beets in Maine.

So in 1963, they worked with the University of Maine, planted 32 test plots, and hired an engineering firm to make a complete economic feasibility study. When released, the study claimed that Aroostook County farmers could earn a $76 profit from each acre of sugar beets, compared with $68 for potatoes, $17.91 for peas, and $1.36 for oats. So in theory, it was a good complement to potatoes.

Although the USDA wasn’t fully convinced that Maine was a good spot to produce sugar, Muskie leveraged the study and pressed for approval. In 1964, the USDA somewhat reluctantly agreed and approved a 33,000 acre allotment, one of only 14 allotments given. Muskie had his prize. Along with the acreage, the allotment would provide $7,000,000 in loans to build a refinery. An important thing to note is that Maine had to grow at least 33,000 acres of sugar beets to keep the deal.

Another Hurdle

With USDA approval, Muskie now needed to find a partner to actually build a processing plant in Maine. Great Western Sugar Company, based in Colorado, agreed to build a plant in Caribou. But in 1965, Great Western abruptly backed out, worried that the acidic soil in Maine (which is good for potatoes) would not be good for sugar beets.

Muskie didn’t want to lose the allotment he fought for, so he contacted just about every processing company in Maine to take on the project.

The Vahlsing Family – Potato Kings (and more)

Just when it looked like the whole Maine sugar beet industry would die before it got going, Fred Vahlsing Jr. stepped up and said he would take it on. Vahlsing was a Texas industrialist who already owned a potato starch and french fry factory in Easton, Maine. He was described in a Feb 1970 article in American Heritage magazine as:

“a plump, cigar-smoking extrovert who overwhelms friend and foe alike with hearty handshakes and grinning good humor”

Vahlsing had food processing operations in multiple places in the U.S. His family had a long history in the vegetable business.

His father, Fred Vahlsing Sr., had recognized the potential in the potato industry in Maine back in the 1920s and created the Vahlsing company in Easton in 1930. Fred Sr. bought potatoes from farmers and shipped them to Boston and New York.

Vahlsing Sr., a native of Long Island, owned businesses in New York, Maine, New Jersey, and Texas. At one point, he was considered the largest vegetable grower and shipper in the United States. He commuted between his businesses with a twin motored plane that he flew himself.

Fred Jr. expanded the Maine family business by opening a potato plant in Easton in the early 1960s, confident that Maine could become a leading potato producer (which it did – currently 8th in production, way behind Idaho).

In Maine, Fred Jr. became very well-known as a big political spender for the Democratic Party. He was famous for hosting lavish fundraising dinners, providing limousines at conventions, and hospitality suites with free booze and food. Ed Muskie was a friend and THE George Mitchell was his lawyer. He knew how to grease palms and get his way.

Vahlsing announced that he would form a new company called Maine Sugar Industries, Inc. and build a sugar beet refinery in time to process the 1966 crop. Vahlsing was bold, loved a challenge, and embraced the public drama around it. He secured financing just in time to meet the time limits set by the USDA.

Because the full allocation of 33,000 acres would only require 130 processing days in the refinery, Vahlsing said he would import and process raw sugar cane for the remainder of the year to keep his staff employed.

Potato Rebound

In a stroke of bad luck, Maine potatoes just happened to have a very nice few years immediately following the lean times that had led to the initial sugar beet interest. Suddenly, farmers who had been worried about relying on potatoes were basking in higher potato prices and not quite as eager to switch to sugar beets. Vahlsing’s new company held meetings throughout the County to sell the idea to farmers and began offering deals on long-term leases for the sugar beet harvesting machinery ($12,000 per farm) that they’d need to use.

Vahlsing managed to only get commitments for 30,000 acres, shy of the required 33,000. So they contracted for another 3,300 acres in New York, which opponents rightly claimed meant that they didn’t meet the USDA allocation requirement.

Year 1: Rocky

The yield that first year (1966) was not good. While other areas in the US could yield 17 tons per acre, Maine could only manage less than 6. And rocks comprised 10% of the total weight that the farmers brought in. The plant managers certainly didn’t want to pay for rocks, but Vahlsing insisted that they do fearing that the farmers wouldn’t come back if they didn’t get their money.

Year 2: Worse

The 2nd year (1967) was far worse. Even fewer farmers planted sugar beets resulting in only 10% of the required acres actually being planted. Vahlsing was forced to buy sugar beets from other Northern states just to keep the plant open. The farmers were making far more money with potatoes and growing sugar beets wasn’t as easy. Weeds easily took over the beds and the herbicides and cutters that Vahlsing provided were not up to the task.

Vahlsing’s Maine Sugar Industries lost $2.7 million in the first nine months of 1969, owed more than $300,000 in back taxes, and was slow to pay farmers for the beets they delivered.

Desperate to stay alive, Maine Sugar Industries started importing sugarcane from South America. The cane was brought to Searsport by boat and then shipped to Easton by train. This was actually working, but then the price of sugar dropped. The company defaulted on its loans and the Maine Industrial Building Authority (MIBA) began foreclosure procedures.

Attempt to Save Sugar Beets

After the MIBA foreclosed on the property and took ownership, they immediately sought a new owner. There was no interest. Then in 1971, they rented the non-operational plant to Magnum Northern Sugar Corporation, which was actually a subsidiary of Vahlsing Inc. Vahlsing was hoping that he could somehow stay connected to the property and buy it back at a greatly reduced rate. That sure sounded sleazy.

Years passed. Then in 1976, a group of Maine farmers hoping to restart the sugar beet business, purchased the plant, and formed the Triple A Sugar Corporation. An Austrian firm called Patzenhofer ran the day-to-day operations and a New York commodity brokerage firm marketed the product.

The End

This last attempt also didn’t work. Plagued by low interest by farmers, low yield, and bad weather, the company was hit by horrible losses. In 1978, the company went bankrupt. The equipment was sold to a Quebec refinery and relocated to their plant.

The sugar beet experiment was finally done in Maine.

McCain Foods

After the original sugar beet operation failed in 1970, Vahlsing found that he had horribly overextended himself and was in tremendous debt. Even though the separate Easton potato processing plant was profitable, his debts forced him to sell the business to McCain Foods, Inc. from New Brunswick in 1976.

McCain is well-known to anyone who has every bought frozen french fries from a grocery store. Founded in 1957, it has 20,000 employees and 50 production facilities across the globe. It is the largest manufacturer of frozen potato products in the world. 1 in 4 french fries are made by McCain.

McCain still runs a sizable potato processing plant on the old Vahlsing land. Since the purchase, they have greatly expanded their operations in Maine. In fact, they now buy roughly 1/3 of all potatoes grown in Aroostook County. I have to assume they’re a little better about the environment than their predecessor.

Polluting The Prestile

By the time the sugar beet factory came online in 1966, Vahlsing’s nearby french fry factory had been pumping polluted waste water into the nearby Prestile Stream for 30 years. He had successfully lobbied to get approval to dump waste water from the factory into the stream which used to have a healthy brook trout population and a Class B rating (Class A=fit for drinking, B=fit for fish … D=effective sewer). The Prestile Stream ran into New Brunswick so Vahlsing got to pollute in two countries. When you make french fries and hash browns, there are waste parts of the potatoes. Those parts are supposed to be treated before being discharged into the stream. Which means settling out the solids and chemically treating the liquid residues.

By 1962, fish were dying in droves in the stream. The Maine Water Improvement Commission reported that Vahlsing was providing “inadequate treatment” for the plant’s wastes. By 1965, Vahlsing had racked up 31 violations due to the plant’s waste. Vahlsing denied any wrongdoing, insisting that he was following the rules. Meanwhile, in nearby Mars Hill which part of the Prestile flowed into, paint was blistering on houses and the stench was unbearable. Mars Hill even had to take on $260,000 in bond debt to build a municipal sewage treatment plan in hopes of getting the Prestile upgraded back to a Class B.

Reclassification and Stink

When Vahlsing announced the building of the new sugar beet processing factory near his french fry plant, locals rightfully were concerned. It meant even more waste water would be dumped into the Prestile Stream. Maine environmentalists protested but Vahlsing fought back. With Aroostook legislators and Muskie in his pocked, he rallied supporters to a hearing in Augusta on the petition to get the Prestile lowered from Class B to Class D so he could pollute at will.

When pressed, he said it would take at least 5 years to build a sewage treatment plant for his operation and by then, the whole venture would fail. He asked if Aroostook County really wanted to miss out on the employment provided and income generated from the sugar beet factory. One of the opposing groups was the League of Women Voters and Vahlsing, ever the showman and charmer, invited all seventy-five members of the League’s delegation to lunch in order to explain his position. They declined.

Aroostook native and then Republican Governor Reed even showed to the hearing and pushed for passage of the Prestile Stream downgrade in support of Vahlsing. Ed Muskie, a so-called champion for the environment and proponent of federal clean water legislation (which got him nicknamed “Mr. Clean”) pressed for “flexibility” in this matter hoping that it would be temporary.

The legislature voted quickly in favor of the stream reclassification which would go into effect the second that the plant came online.

“Various sources close to the situation at the time said that the state did everything possible to avoid a showdown with Vahlsing because the state was so heavily committed financially by backing loans for the potato processing plant as well as $6 million in loans for the sugar refinery.” – Times Record

Means to an End? Muskie Guilt?

Supposedly, Ed Muskie was so horrified by what happened with his support of Vahlsing and the pollution of the Presile Stream by his businesses, that he refocused his environmental efforts to introduce and ultimately pass the the Clean Water Act of 1972.

The support of Vahlsing didn’t seem to permanently harm Muskie’s political career. He had already served in the Maine House of Representatives (1946-1951), as Governor of Maine (1955-1959), as US Senator (1959-1980), and US Secretary of State (1980-1981). He was also nominated for Vice President in 1968 running with Hubert Humphrey (barely lost to Nixon/Agnew). He ran for President in 1972 but lost the primary to George McGovern. Jimmy Carter chose Walter Mondale over Muskie for the 1976 election.

The Vahlsing Special: Two Drinks and You’re Polluted

A 1970 article in American Heritage magazine detailed the pollution of the Prestile Sream by Vahlsing’s businesses, showing how large of an area and how many people were affected by the illegal dumping by the industry into the stream. In the article, they said you could visit the Royal Canadian Legion bar in Centerville, New Brunswick and order a drink called the Vahlsing Special.

“It’s a shot each of Scotch, vodka, gin, and rum, poured over crushed ice … two drinks and you’re polluted!