U.S. SUGAR -- UPDATE ON SUGARCANE CROP AND VALENTINE'S DAY FREEZE
Friday, March 3, 2006

CLEWISTON - This year’s crop was already badly damaged from Hurricane Wilma, with more than 25% losses due to the storm.

“We got hammered by the hurricane and then got hammered again by the freeze. It is going to be a very difficult year for the Company financially as the expenses of making hurricane repairs continue to mount and our sugar production continues to drop,” said Robert Coker, Senior Vice President.

“This is shaping up to be the worst year in our 75 years of being in business,” Coker said.

U.S. Sugar’s entire cane crop was subjected to below freezing temperatures for durations of up to 6.75 hours with temperatures dropping as low as 24.6 degrees for extended periods of time in some areas. Immediately following the freeze, we conducted initial damage assessments and adjusted our harvest schedule to target fields based on historical knowledge of the varieties and areas most susceptible to freeze damage.

It generally takes a week or so following a freeze event to determine the extent of the damage to the crop. When the cane stalk freezes, water in the stalk expands, damaging the tissue or inner cells of the stalk. This tissue damage inhibits cane’s natural defenses to bacteria and the deterioration process is accelerated. It takes approximately a week for the bacteria to colonize and the crop to start showing signs of damage.

This field by field assessment was completed this week. We have 1.4 million tons of cane left to harvest. Fifty percent of that cane was frozen. We have revised our harvest schedule in an effort to minimize further losses due to deterioration of the frozen cane. Our goal is to harvest this cane within the next three weeks.

In addition to sugar losses in the freeze-damaged mature cane, 75-85% of the young plant cane or regrowth cane was burnt back to the ground by the freezing temperatures. It must essentially re-start the growth process. All growth that had occurred since planting or harvesting was lost, and the next year’s crop, for all intents and purposes is all at the same stage in the growth process. This will complicate our cultivation program in that the entire crop will require the same attention simultaneously. This will significantly add to our costs as services will need to be done all at the same time and not spread out over the growing season.

The next step is to evaluate terminal bud damage on the recently planted cane. The terminal bud is what drives plant growth. As much as 3000 acres of plant cane may have dead terminal buds. Each field will be evaluated on an ongoing basis from this point forward.

“As the season winds down, we expect to see further reductions in cane tonnage and sugar yield,” Coker said.

“Florida sugar farmers are not used to asking for a hand out,” Coker said, “but we have asked Congress to consider some level of financial assistance to help us get through these very difficult times.”

“Our growers, our employees, our suppliers and our rural communities all have suffered tremendously as a result of Hurricane Wilma. Anything Congress can do to help get people back on their feet will be appreciated,” Coker said.