Snack Attacked

After a handful of powerful food manufacturers sounded the sugar shortage alarm last week, calls began flooding the American Sugar Alliance switchboard.

After a handful of powerful food manufacturers sounded the sugar shortage alarm last week, calls began flooding the American Sugar Alliance switchboard.

People wanted to know if they should start hording ho hos, collecting cupcakes, or stockpiling snicker doodles.  And who can fault the hysterics considering the country’s favorite snack makers just warned that America could “virtually run out of sugar” in a letter to the U.S. Department of Agriculture (USDA).

Then a funny thing happened.  The phones went quiet, which was amazing since the American Sugar Alliance publicly begged candy companies to call if they were having trouble finding sugar.

With strong domestic sugar crops and near-record imports, there’s more than enough sugar to go around.  In fact, one major sugar marketer called signers of the USDA letter and was unable to unload a single sugar packet.

The apparent surplus-shortage mix-up was confirmed when the USDA released a report showing excess sugar stocks growing to around 11 percent of consumption this year—a healthy carryover amount in any economy.

So why would food manufacturers that are normally so keenly in-tuned to the intricacies of ingredient markets incite near riots at cookie counters from coast to coast?  Did they intentionally mislead consumers and government officials?

Probably not.  It’s more likely the result of overly aggressive candy lobbyists focused too intently on a minute political battle without giving much thought to the real-world consequences of their actions.

For the better part of two years, food lobbyists have sent letters to the USDA predicting widespread shortages in an attempt to gain access to subsidized foreign sugar and drive down their ingredient costs.

And for the better part of two years, the USDA has seen through these claims and wisely let domestic market conditions take hold before opening the floodgates to more imports.

Despite routine import request denials, the food manufacturers are still doing well for themselves—so well that the National Confectioners Association and other industry leaders have crowed about profit margins of 30 percent or more.

The real political endgame is food manufacturers’ desire to gut U.S. sugar policy, which ironically exists to stabilize a potentially volatile sugar market and keep prices affordable.

This policy was shaped as a result of two distinct events in U.S. history.  First, food rationing in World War II when America was so dependent on foreign sugar suppliers that chocolate bars seemed as valuable as gold.  And second, a brief period in the late 1970s after America temporarily eliminated its sugar policy and got burned by a worldwide sugar shortage and record prices.

These events left food manufacturers and government officials longing for a strong domestic sugar industry that could insulate America from future roller coaster rides.

No matter what you think of sugar policy, that’s exactly what they received for the past three decades.

Sugar prices have barely budged since Jimmy Carter sat in the Oval Office and quality homegrown sugar remains just a phone call away—which is why we’ve taken out an advertisement in the Wall Street Journal today asking food companies to please call if they really are short on sweeteners.

Despite our differences on Capitol Hill, America’s food companies have no better friend than the U.S. sugar producer when it comes to ensuring adequate supplies.  It is in our best interests to avoid shortages and keep our customers’ assembly lines humming.

That’s why we’ve pledged to the USDA that we will be supportive of additional imports if supplemental supplies are needed.

But for now, U.S. sugar growers have got plenty to sell.