American Crystal Sugar has informed union workers that the company is beginning to “prepare for the possibility of a labor dispute,” even though the current contract doesn’t expire until Aug. 1, 2017. The reason: Union leaders refused a recent contract extension proposal.

Union leaders said they declined because it’s too early to reopen the contract and that the company’s terms for an extension — including only two days of negotiations — were inadequate.

Moorhead-based Crystal Sugar, the nation’s largest beet sugar producer, locked out 1,300 union workers on Aug. 1, 2011, after they rejected a contract. The lockout, which lasted 22 months, was one of Minnesota’s longest, largest and most bitter work stoppages in recent decades. Crystal, owned by beet farmers, has Minnesota sugar mills in Moorhead, East Grand Forks and Crookston, and two more in eastern North Dakota.

American Crystal’s lawyer contacted the union’s lawyer during the second week of November, asking for early negotiations, said John ­Riskey, head of Local 167G of the Bakery, Confectionery, Tobacco Workers and Grain Millers union. The company wanted to extend the current contract through July 31, 2021, though wage increases and pension improvements — as well as a possible signing bonus — were up for negotiation.

Normally, Crystal Sugar negotiations don’t take place until the year in which a contract expires — 2017 in this case, union leaders say. And almost all labor negotiations take weeks to complete. “We told them it was too early to meet and that we could look at doing this down the road,” Riskey said. “They wanted it all done in a two-day period before Christmas.”

Plus, if the contract is to be extended, the union wants noneconomic issues on the table, too.

Lisa Borgen, administration vice president for Crystal Sugar, said the company’s proposal to the union “was an invitation to start talking … We felt it was really a good-faith effort to avoid any conflict and come to a resolution sooner rather than later.”

On Nov. 30, Crystal Sugar sent a letter to workers informing them of the company’s contract extension proposal “in an effort to avoid the possibility of a strike or lockout in 2017.” The letter, signed by Borgen, said Crystal remains “hopeful no dispute will occur,” but was “left with no alternative but to begin to prepare for the possibility of a labor dispute.”

Riskey said workers “looked at [the letter] as a threat that the company would lock out its employees without even sitting down at the table.”

John Budd, a labor relations expert at the University of Minnesota’s Carlson School of Management, said that while there’s nothing wrong with meeting early before a contact expires, Crystal’s effort is unusual.

“To send out a letter talking about the possibility of a strike so far in advance seems unnecessarily aggressive and counterproductive,” Budd said. “It seems like the company is trying to pick a fight, or trying to create dissension within the rank-and-file in order to weaken the union.”

In July 2011, Crystal’s union workers resoundingly rejected a contract that called for raises of 13 percent over five years, but also required health benefit cuts and significant contract language givebacks, including fewer seniority rights. Workers voted on essentially the same contract four more times, approving it on the fifth try.

Only about 400 of the original 1,300 locked-out workers returned to Crystal Sugar, because many had retired or moved on to other jobs.