Make us your home page
Instagram

USDA tries new strategy to stem glut of sugar imports

WASHINGTON — U.S. sugarcane and sugar beet farmers are bracing for a flood — but not one caused by the weather. Rather, it's a flood of imported sugar from Mexico. Record production and imports are poised to sweeten the U.S. market a bit too much.

"This is a lot of sugar for our country to cope with," said Jack Roney, the director of economics and policy analysis at the American Sugar Alliance, an industry group of U.S. sugar producers. "Prices are dropping to levels not seen since the 1980s, and the USDA is trying to avoid the consequences of that catastrophe."

To deal with the glut, the U.S. Department of Agriculture has taken the unusual step of retiring sugar import credits and purchasing more than 100,000 tons of sugar, which allowed it to take 330,000 tons of surplus sugar off the market.

The plan, which cost $43.8 million, weaved through a maze of sugar policy, transferring purchased sugar from the Agriculture Department to refiners in an attempt to lower foreign imports. In return, refiners surrendered import credits that had been awarded to allow them to bring in sugar from overseas.

The Agriculture Department expects the plan to save it an estimated $66.9 million by avoiding loan forfeiture costs from its sugar loan program. But many surrounding the industry say the move doesn't make up for what they charge is outdated policy.

Brian Mabry, acting coordinator of the department's communications office, said officials had to take action among "atypical market conditions this crop year, including record yields and increased imports."

Mexico's recent sugar surplus is causing problems for the U.S. market because that country has unlimited access to the U.S. market, because of provisions that are part of the North American Free Trade Agreement. A June Agriculture Department report predicts that Mexico will export its record sugar surplus to the United States, shipping more than 1.9 million tons into an already-saturated market this year.

"It's really become one market only separated by the costs of moving product around," said Tom Earley, vice president of Agralytica, a Washington food and agriculture consultancy.

Sugar prices are nearing levels unseen since the 1980s. Prices have fallen to 16 cents per pound for raw sugar. U.S. prices peaked at an average of 38 cents per pound in 2011, after having fallen to 18 cents in 2000.

Protecting the domestic market from heavily subsidized foreign sugar producers — such as those in Mexico, where the government owns a 20 percent stake in the sector — is a priority for the American Sugar Alliance. "We have a U.S. sugar policy for one reason only, and that's foreign subsidization," said Phillip Hayes, the alliance's director of communications. But opposition to the safety nets enacted under the U.S. sugar program rose to new levels during this year's debate over a new five-year farm policy. Many confectioners and candy companies view the surplus plan as a patch for outdated policy.

"The fact that the current sugar program is forcing the USDA — and ultimately American taxpayers — to pay a $44 million down payment for excess sugar ahead of expected loan forfeitures later this summer underscores exactly why this program needs to be reformed," said Jennifer Cummings, a spokeswoman for the Coalition for Sugar Reform.

USDA tries new strategy to stem glut of sugar imports 07/23/13 [Last modified: Tuesday, July 23, 2013 9:02pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Tribune News Service.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. In advertising, marketing diversity needs a boost in Tampa Bay, nationally

    Business

    TAMPA — Trimeka Benjamin was focused on a career in broadcast journalism when she entered Bethune-Cookman University.

    From left, Swim Digital marketing owner Trimeka Benjamin discusses the broad lack of diversity in advertising and marketing with 22 Squared copywriter Luke Sokolewicz, University of Tampa advertising/PR professor Jennifer Whelihan, Rumbo creative director George Zwierko and Nancy Vaughn of the White Book Agency. The group recently met at The Bunker in Ybor City.
  2. Tampa Club president seeks assessment fee from members

    News

    TAMPA — The president of the Tampa Club said he asked members last month to pay an additional assessment fee to provide "additional revenue." However, Ron Licata said Friday that the downtown business group is not in a dire financial situation.

    Ron Licata, president of the Tampa Club in downtown Tampa. [Tampa Club]
  3. Under Republican health care bill, Florida must make up $7.5 billion

    Markets

    If a Senate bill called the Better Care Reconciliation Act of 2017 becomes law, Florida's government would need to make up about $7.5 billion to maintain its current health care system. The bill, which is one of the Republican Party's long-promised answers to the Affordable Care Act imposes a cap on funding per enrollee …

    Florida would need to cover $7.5 billion to keep its health care program under the Republican-proposed Better Care Reconciliation Act of 2017.  [Times file photo]
  4. Amid U.S. real estate buying binge by foreign investors, Florida remains first choice

    Real Estate

    Foreign investment in U.S. residential real estate recently skyrocketed to a new high with nearly half of all foreign sales happening in Florida, California and Texas.

    A National Association of Realtors annual survey found record volume and activity by foreign buyers of U.S. real estate. Florida had the highest foreign investment activity, followed by California and Texas. [National Association of Realtors]
  5. Trigaux: Tampa Bay health care leaders wary of getting too far ahead in disruptive times

    Business

    Are attempts to repeal Obamacare dead for the foreseeable future? Might the Affordable Care Act (ACA), now in dire limbo, be revived? Will Medicaid coverage for the most in need be gutted? Can Republicans now in charge of the White House, Senate and House ever agree to deliver a substitute health care plan that people …

    Natalia Ricabal of Lutz, 12 years old, joined other pediatric cancer patients in Washington in July to urge Congress to protect Medicaid coverage that helped patients like Ricabal fight cancer. She was diagnosed with Ewing's sarcoma in 2013 and has undergone extensive treatments at BayCare's St. Joseph's Children's Hospital in Tampa. [Courtesy of BayCare]