This time 50 years ago, the Maine Sugar Industries plant in Easton was getting ready to start churning out its first batches of sugar made from beets grown in Aroostook County.
What followed is now known as an epic failure of big business and government, but it kind of started by chance, according to John Cancelarich, the engineer who helped run the beet and potato processing plants of Texas industrialist Fred Vahlsing.
Cancelarich, an 86-year-old Presque Isle resident, recounted his experience living through the sugar beet factory saga during a presentation on Nov. 12 at the Easton High School library.
“The Maine Sugar story is often looked at as a basic failure, which it was in one respect,” Cancelarich said.
The company’s failure to pay government-backed loans and control pollution on the Prestile Stream ended up costing federal and state taxpayers $30 million at the time, or what would amount to about $180 million today.
“But in a way, it was a noble failure,” said Cancelarich, who came to work for Vahlsing as a young engineer from an immigrant family in New York City. “It was also a vision for what we hoped to accomplish. We hoped to employ 200-plus people and get a second viable rotation crop for potatoes.”
Vahlsing, a boisterous industrialist who inherited his father’s businesses and wealth, did not have the idea for sugar beets on his own, Cancelarich said.
In 1964, U.S. Sen. Ed Muskie of Maine helped secure a federal “allotment” of acres that could grow sugar beets in the state, under a system that regulates prices and supply of sugar. Offers of government-backed financing for processing companies garnered the interest of Great Western Sugar of Colorado, which proposed building a sugar beet plant in Caribou.
Later that year, though, before any beets were ever planted, Great Western dropped those plans, citing concerns about growing beets in the acidic, rocky soil of Maine. Acidic soil has long been a benefit for keeping away blight in potatoes, but sugar beets thrive in more neutral soil.
“As soon as they pulled out, Muskie did not give up,” Cancelarich said. “He strove to save the allotment by contacting nearly all of the processing companies in Maine to take over this particular project.”
When he contacted Vahlsing, the owner of a potato starch and french fry factory in Easton, “Vahlsing jumped right in it,” Cancelarich said.
“He was thrilled by the fact that, number one, he had been approached by a major senator,” and he also was making “good money” at the potato factory in Easton, Cancelarich said.
By 1966, Vahlsing had obtained loans from more than 40 private investors whose money was backed by the federal Economic Development Agency and the Maine Industrial Building Authority.
“In today’s dollar, those loans amount to $180 million,” Cancelarich said. “It just shows you the size of the expenditures we were making here.”
The factory, which went online in January 1967, was set up to produce up to 50,000 tons of sugar annually, but farmers ended up planting about 3,300 acres, less than half of the state’s allotment from the start.
With low yields, low sugar content and lots of rocks in the beets, Cancelarich estimates that the factory produced less than 2,000 tons of actual sugar that first year — less than 5 percent of its capacity.
The average yield the first year was 5.8 tons of beets per acre — compared with an average of 17 tons per acre in other growing regions — and rocks made up at least 10 percent of the weight of the beets delivered, Cancelarich estimated. He and other managers didn’t want to pay farmers for the weight of the rocks, but Vahlsing insisted.
“Freddy said, ‘Pay for the rocks. We’ve got to do it. You start gypping them for rocks, they won’t come back next year,’” Cancelarich said.
The second season of sugar beets brought in about the same acreage and yields, and the factory had to import beets from other Eastern states. Maine farmers earning good money selling potatoes in the heyday of fresh-market spuds couldn’t be persuaded to grow beets. Among other problems, weeds could easily overtake beets and did not respond to either the rotary cutter equipment or the herbicides that Vahlsing and Cancelarich gave the growers.
At multiple levels of the sugar beet business, Vahlsing lost money, but he kept digging the hole, including with money from his family’s foundation, Cancelarich said.
“We dammed the Prestile Stream and built what we called Lake Christina,” as a source of clean water for beet processing, Cancelarich said. “Another lake we built was called Lake Josephine, which was a waste plant for the potato plant. Both were named after Vahlsing relatives — Christina was a favorite daughter of his, while Josephine was his sister with whom he constantly fought over the family foundation’s money.”
Even as it started struggling on loan payments, Maine Sugar Industries imported sugarcane from South America, brought to Searsport by boat and to Easton by train. With a simple process to make sugar, the factory was actually doing OK, but then the price of sugar dropped, Cancelarich said.
In early 1970, Maine Sugar Industries defaulted on its loans, and the Maine Industrial Building Authority started foreclosure procedures.
“That was that,” Cancelarich said.
“I believe the equipment was eventually sold to a Quebec company at a great loss to the state of Maine,” he said. “We owed money to farmers in five states, including in Maine, and the Maine sugar beet farmers did receive their money, without interest I would say.”
While Vahlsing’s nearby potato plant was operating “fairly well” in the early 1970s, Vahlsing’s sugar beet liabilities drained that factory of money, and in 1976, it was sold to McCain Foods, a young frozen french fry company from just over the border in Centreville, New Brunswick.
“I remember Harrison McCain: tough negotiator,” Cancelarich said.
Settling in Presque Isle, Cancelarich went on to have a successful career starting and running other food processing businesses in the region, while raising four children with his wife, Johnny, an Arkansas native and devout Catholic. Over their time in the community, they’ve done everything from financially supporting the Presque Isle library to holding anti-war peace vigils and sponsoring trips to The County for youth groups from other states.
Vahlsing left Maine with a cautionary tale of economic development and water stewardship — he fought with the state over cleanup costs on the Prestile into the 1980s. Cancelarich argues that Vahlsing also left positive economic ripple effects in the two industrial sites in Easton that are now two of Aroostook County’s major factories.
In 1981, the former site of the sugar beet factory became the home of Huber Engineered Woods, which employs about 140 people making flooring, sheathing and other wood products. The McCain Foods factory down the road employs about 500 people and buys about one-third of all the potatoes grown in Aroostook County.
Through his french fry business and its evolution to McCain, Vahlsing helped kick off the move to processing potatoes, which now account for about two-thirds of the state’s potato crop, Cancelarich said.