The Hagstrom Report

Agriculture News As It Happens


Sweetener users still want current U.S. sugar production

COEUR D’ALENE, Idaho -- U.S. sweetener users want lower sugar prices, but they still want to keep U.S. sugar production at the same levels on a widely spread geographic basis, a key sweetener industry official said after grower and user representatives discussed the future of the sugar program here at the American Sugar Alliance International Sweetener Symposium last week.

Until 2008, the Sweetener Users Association, which represents industrial users of sugar, had said they would be willing to rely on sugar from the world market if the sugar program were ended, but after hurricanes in Louisiana and Florida created a shortage the group said they wanted U.S. production continued.

The users have been a key component of the Coalition for Sugar Reform, which has waged a campaign this year to convince Congress to shift the sugar program back to pre-2008 farm bill levels. Before that legislation was passed, support prices were lower and it was easier for USDA to allow more imports to enter the United States.

But Sweetener Users Association President Randy Green said in an email to The Hagstrom Report that the group still wants sugar production to remain at current levels and produced throughout the country. Green said the group also wants the Agriculture Department to raise its goal of keeping the stock-to-use ratio for sugar to 15.5 percent rather than the current 14.5 percent.

“Both are compatible with reforming the program,” Green said.

But growers say they need the prices under the program to maintain profitable farms that can make investments to sustain current levels of production in all sugar-growing areas of the country.

Green sent the email in response to questions after an August 6 discussion of the program at the ASA symposium, at which Tom Earley, the vice president of Agralytica, an Alexandria, Va., consulting firm who serves as economist, for the sweetener users, said that sugar program administration from 2009 to 2012 has given sugar users “a lot of heartburn,” because prices have been high and there has been uncertainty about supply.”

Amendments to the farm bill that would have changed the sugar program failed on the Senate floor and in the House Agriculture Committee.

Earley said at the symposium that users believe that if the farm bill comes up on the House floor there would be a vote on the sugar program and they would fare better, but that he thinks it is unlikely the bill will come up on the House floor this fall.

Although growers need the users to buy their sugar and the users need sugar, and battles over the sugar program occur each time the farm bill comes up for reauthorization, relations between the groups appeared at the symposium to have grown unusually bitter.

“I don’t think the advocates of reform demonize their suppliers,” Earley said. “I don’t think there is any reason for you to demonize your customers.”

Noting that the users had not called for dismantling the program, Earley said, “There is room for a more collaborative relationship.”

Earley said he was referring to ASA comments on the profitability levels of candy companies and petroleum companies and the level of the companies’ profits at a time they are trying to convince Congress to change the sugar program in a way that would lower sugar prices.

But an ASA official said that the group had focused on candy companies because they had been in the forefront of the campaign to change the program

Jack Roney, the ASA chief economist, also said that the users’ approach had hardened this year.

“They are gentlemen, nonetheless, they are wrong,” Roney said on the panel with Earley. “It’s a real battle in Washington this fall. The gloves have come off.”