Workers at American Crystal Sugar's five Red River Valley plants overwhelmingly rejected a high-stakes contract offer Saturday.

The farmer-owned cooperative, the largest U.S. beet sugar producer, plans to make good on its threat to lock out its 1,300 workers -- and bring in replacements -- if a new contract wasn't in place when the current one expires Monday. The lockout will begin at midnight Sunday, said company Vice President Brian Ingulsrud.

The federal mediator involved in the talks will be contacted about when negotiations can resume. He said the union rejected a 13 percent pay increase over a five-year contract plus a $2,000 signing bonus.

With nearly all members of Local 167A of the Bakery, Confectionery, Tobacco Workers and Grain Millers voting, 96 percent rejected the company's offer, union President John Riskey said in a statement.

He said the union is ready to resume talks as soon as possible. "A lockout will be devastating not only to the 1,300 affected families, but to the entire Red River Valley community."

"These negotiations are not and never have been about pay," Riskey added. "The company's offer still has major loopholes allowing non-union contractors to replace union workers and makes health insurance unaffordable. Any raise is meaningless if our health care costs increase even more or if management can eliminate our jobs and replace us at will."

Ingulsrud said Riskey mischaracterized the company's offer. He said the company would have to meet certain stipulations before it hired non-union workers and could not layoff union workers if it did.

Health costs would go up an average of about $1,000 per employee, which is significantly less than their pay increase, the company said. The union says their out-of-pocket health care costs, on average, would more than double.

The union vote involves three Minnesota plants, in Moorhead, Crookston and East Grand Forks. Moorhead-based American Crystal Sugar is one of the largest employers in northwestern Minnesota.