CONTACT: Phillip Hayes
WASHINGTON—The American Sugar Alliance issued the following statement about today’s announcement that sugar was forfeited to the U.S. Department of Agriculture due to depressed sugar prices.
“A wave of unneeded, subsidized Mexican sugar has sent U.S. prices plummeting since 2010, and as a result, some sugar producers will be unable to repay government-backed operating loans with interest. It is unfortunate for America’s farmers and taxpayers that the United States has become a dumping ground for subsidized Mexican sugar, much of which is produced and owned by the Mexican government.
“The USDA should be applauded for its actions this summer to reduce the threat of loan forfeitures, and it should continue to use all tools available to avoid future forfeitures.
“Even with today’s forfeiture, U.S. sugar policy remains, by far, the cheapest major commodity policy. It ran without taxpayer cost from 2002-2012 and has consistently come in well below Congressional Budget Office cost estimates.
“U.S. sugar producers remain committed to addressing the global subsidies that have distorted sugar markets in the United States and abroad. Curbing subsidies from Mexico, Brazil and other major exporters is the only way to avoid continued problems and help a true free market take hold.”
Current sugar prices are below the average price of the 1980s and production costs have steadily risen, creating difficulties for U.S. producers, who are among the most efficient in the world.
To keep its own inefficient sugar businesses afloat, the Mexican government bailed out numerous mills and today owns and operates 20 percent of the country’s sugar industry. That makes the government Mexico’s largest sugar producer and exporter. The Mexican industry has sent America more than 2 million tons of sugar this crop year.
The USDA has purchased more than $50 million in sugar and implemented a sugar-to-ethanol program to help alleviate falling prices. Without those efforts, it is likely that today’s forfeiture of $35 million would have been higher. Another $300 million in sugar loans come due at the end of September, and if prices remain depressed, those loans are in danger of forfeiture as well.