How was the Thai sugar industry able to achieve production gains while world sugar prices were falling?
It’s not often when confectioners openly admit the success of their industry. After all, doing so cuts against the tales they spin on Capitol Hill of sugar policy causing economic hardship. But as the American Sugar Alliance’s compilation of good candy news demonstrates, Big Candy’s business has been firing on all cylinders since the most…
Despite a collapse of global sugar prices, Thailand has been able to maintain high levels of sugar production thanks to at least $1.3 billion a year in subsidies and other policies – all of which has only exacerbated the glut of sugar currently distorting the world market.
For two years, U.S. sugar producers have pushed for a multilateral solution to the global sugar subsidies that have wrecked the global market.
Under this plan, known as the Zero-for-Zero sugar policy, sugar producers around the world would eliminate sugar subsidies and market-distorting policies so that a free market can form. And the World Trade Organization (WTO) is the logical venue for such reforms to be accomplished.
Earlier this month, a national farming television program called the U.S. Farm Report ran a segment that used decades-old talking points about U.S. sugar policy to completely mischaracterize U.S. producers’ stance on trade. Sugar beet farmers who saw the show were rightly furious and contacted the show’s producers to set the record straight.
“Cane is just like a hen that lays golden eggs… We are sure that arrears will be cleared with government help.”
One of Big Candy’s tired talking points against U.S. sugar policy is the fallacy that American food manufacturers are closing shop and heading to other countries because of U.S. sugar prices.
The Big Candy lobby and its congressional allies launched a surprise attack against U.S. sugar policy on April 22. And it used a highly unusual vehicle in its attempt to sabotage the recently passed farm bill: an African aid package.
An amendment offered by Pennsylvania Republican Sen. Patrick Toomey would have used the African Growth and Opportunity Act to flood the U.S. market with unneeded sugar imports.
The Senate Finance Committee rejected the scheme on a 10-16 vote, with the panel’s top Republican and Democrat – Sens. Orin Hatch (R-Utah) and Ron Wyden (D-Ore.) – both opposing the plan.
A subsidized bailout package worth approximately $320 million was just announced for India’s struggling sugar sector.
But before we dissect the details of the latest subsidy handout, let’s first revisit India’s other big subsidy announcements this year, which are helping destroy the world sugar market.
We don’t have the same sugar subsidies as Brazil, so we can’t sell you sugar below the cost of production. But, we can promise you sugar of the highest quality, produced by efficient Americans and delivered on schedule to your door at a fair price.
In February, the American Sugar Alliance unveiled a new online resource that tracks foreign sugar subsidies as part of its campaign for a free global sugar market. Since that time, the catalogue of media stories has been filled with news of an oversupplied world market where prices are far below average production costs. Fueling the…
It’s that time of year again. Birds are chirping, trees are budding, and bulbs are flowering.
Small children are excited about spring break, egg hunts, and decorated Easter baskets.
And Big Candy is busy complaining on Capitol Hill even though they are selling more product than ever – more than $2.2 billion worth of candy this Easter alone.
Last week, the National Farmers Union (NFU) convened its annual convention to set policy positions for the country’s second largest farm organization over the next 12 months. And part of that updated policy portfolio is continued support for America’s sugar farmers and the policy on which they depend.
The global sugar community chastised India when it announced export subsidies last year that seem to be in clear violation of WTO rules. Those subsidies, which were set at $53 a ton in February and increased to $54 a ton later in the year, helped the country offload 2.8 million tons onto the already depressed global market in 2014.
India responded to the international criticism by upping the subsidy to $64 a ton in 2015.
FOR IMMEDIATE RELEASE: March 3, 2015
CONTACT: Phillip Hayes, 202-507-8303
WASHINGTON-Congressman Ted Yoho (R-FL) reintroduced his Zero-for-Zero sugar policy, on Friday, which would instruct the administration to target the foreign sugar subsidies that are distorting world prices and keeping a free market from forming. Under the plan, U.S. sugar policy would also be rolled back in exchange for the elimination of foreign programs.
Members of the American Sugar Alliance (ASA) praised Yoho and the eight original co-sponsors of H.Con.Res. 20, and said sugar farmers from across the country are in town this week to educate lawmakers about the current U.S. policy and to encourage support for the resolution.
It was the subject of more than 40 congressional hearings and countless hours of careful debate. It was touted as a major bipartisan accomplishment of the 113th Congress. And the package will save taxpayers billions. Yet just one year after passage, and before many aspects of the 2014 Farm Bill have even been implemented, anti-agriculture…
FOR IMMEDIATE RELEASE: February 19, 2015
CONTACT: Phillip Hayes, 202-507-8303
WASHINGTON — U.S. sugar producers today unveiled a new resource on the American Sugar Alliance (ASA) website that catalogues increases to foreign sugar subsidies made over the past two years. The site, which provides links to news reports about international subsidy changes, already includes nearly 30 entries.
India’s sugar export subsidy is probably illegal under World Trade Organization rules, but that hasn’t stopped the country from – once again – making adjustments to it. And surprise, surprise, the adjustment will send the subsidy higher, not lower.
In late January, India’s food minister signed off on an export subsidy rate of 4,000 rupees ($64) per ton of raw sugar. That’s up from a subsidy of 3,300 ($53) rupees per ton, which was set in February of 2014 and then promptly increased to 3,371 ($54) rupees in August.
India exported 2.8 million tons of sugar last year with the aid of this subsidy, and this year, the Indian sugar lobby says it will need to offload about 2 million tons to keep domestic prices high.
It’s no big secret that big candy companies like to badmouth sugar farmers for being “protectionist.”
Even though America is the world’s biggest sugar importer, the market is never quite open enough for the candy man’s liking. Heavily subsidized sugar grown by less efficient foreign countries with substandard labor, environmental, and safety standards should flow freely through America, even if it bankrupts rural businesses and farms, they contend.
Heck, the confectioner lobby has even bashed sugar producers for asking that U.S. laws be enforced to stop Mexico from dumping subsidized sugar onto the U.S. market and harming U.S. sugar producers and taxpayers.
FOR IMMEDIATE RELEASE: February 9, 2015
CONTACT: Phillip Hayes, 202-507-8303
WASHINGTON—U.S. sugar policy is expected to cost taxpayers $0 from FY2015 to FY2025, according to projections released last week by the United States Department of Agriculture (USDA).
Sugar policy is the least expensive major commodity policy in the Farm Bill because farmers repay loans with interest instead of receiving subsidy checks. It ran at no cost to taxpayers from 2003 to 2012 and again in 2014.
There was a net cost of $259 million in 2013 when the USDA had to take emergency action to prevent the market from collapsing after Mexico dumped a record amount of subsidized sugar onto the U.S. market.
The American Sugar Alliance today sent all new Members of Congress a letter detailing the need for a strong sugar policy, the successful track record of the existing policy, and the importance of rejecting unilateral disarmament.
With a dominant 50% market share of global sugar exports, Brazil can exert more control over prices than any other sugar producer. Brazilian subsidies and policy decisions affect consumers and farmers around the world, who are helpless to combat a behemoth whose primary goal is to increase its monopolistic reign.
It’s why Brazil is called the OPEC of sugar, and it’s why we were not surprised to read about how even decisions in Brazil’s gasoline sector can move sugar prices.
The American Farm Bureau Federation recently completed its 2015 annual convention and with it the group’s 2015 policy positions. The nation’s largest farm organization continued its supportive stance of U.S. sugar policy. The Farm Bureau’s position on sugar reads: We support: (1) A program to protect the interests of domestic sugar producers and recommend that…
Louisiana sugar producers are fond of saying that their industry is older than the country itself. Formed when Jesuit priests first planted the crop in New Orleans in 1751, the industry has survived hurricanes, droughts, and even a Civil War to grow into an economic engine.
Sugar is woven into the fabric of the state’s heritage arguably as much any other crop anywhere else in the country and even has a college football bowl game named after it.
Unfortunately, a proud tradition doesn’t always equate financial success, which farmers in south Louisiana have found out the hard way in recent years. A flood of subsidized Mexican sugar was dumped onto the U.S. market sending prices spiraling, even as the price for things like equipment, seed, and fuel steadily rose.
World sugar prices are depressed and are likely to remain in the doldrums over the coming year as surpluses overhang the market. That’s according to a Dec. 24 report issued by Rabobank, one of the largest banks in the world and key lender to the U.S. food industry.
Rabobank pointed to the growing cycle of sugar cane, which is a semi-perennial crop that prevents producers from quickly downshifting production, as a factor in the continued oversupply.
Months after receiving preferential government loans, Indian sugar farmers soon will be allowed to walk away from their debts without repayment of either principal or interest, according to a Dec. 9 article by Bloomberg.
The outlet explained how some well-heeled agribusinesses are using the free money to expand at a time when the world sugar market is awash in a glut of subsidized surplus.
Things are going well for Mars, the maker of treats like M&Ms and Snickers. A recent profile on the company by the Wall Street Journal summed it up this way:
While many U.S. food companies are closing factories and cutting staff, Mars Inc. recently opened its first new chocolate factory in the country in 35 years to feed Americans’ seemingly boundless hunger for sweets.
The $270 million plant boasts two production lines that can produce 8 million miniature Snickers candy bars and 39 million peanut M&M’s every day. At one end of the line, a waterfall of milk chocolate covers hundreds of tiny Snickers bars each minute, infusing the air with the smell of candy. The factory’s 500,000 square feet, kept carefully at 68 degrees so the chocolate doesn’t melt, include space for another three production lines so Mars can expand.
The article offered a small peak inside of a company that is privately held and usually keeps financial information close to the chest.
Mars discloses little about its finances, except to say that its annual revenue last year topped $33 billion—about 50% higher than in 2007, thanks largely to the 2008 acquisition of Wrigley. Chocolate is Mars’s second-biggest business globally, after pet care.
According to the Wall Street Journal, Mars is battling Hershey for a bigger slice of the U.S. chocolate market, growing from 24% to 28% over the past year.
Earlier this week, a longtime anti-sugar critic penned an article in the Wall Street Journal attacking U.S. sugar farmers and the policy on which they depend.
Fortunately, the newspaper brought some balance to the debate by publishing the American Sugar Alliance’s response to the article today.
“For much of the past decade, African and foreign sugar companies have pumped billions of dollars into projects in an attempt to tap the sweet tooth of the continent’s new middle class. Today, mills in many countries are grappling with unsustainable stockpiles. The glut has forced companies to reduce output, put on hold new sugar projects and shutter mills.
“The culprit: cheap imports. African nations import about 5 million metric tons of sugar every year, from countries such as Brazil, China and India. The imports—generally heavily subsidized—are sold at prices lower than the cost of producing sugar locally, prompting African countries to shun sugar from their neighbors.”
To better understand Thai sugar subsidies, it is important to first understand Thai sugar production.
All the little ghosts, goblins, and ghouls won’t have to worry about there being enough sugar to make their favorite Halloween treats this year.
That’s according to the U.S. Department of Agriculture, which recently reported that as of September 30, America’s sugar stocks-to-use ratio was 15.2%.
Grocers do not have easy jobs.
Keeping fresh food stocked in well-lit, clean, giant stores so that Americans can shop on a whim for everything from cumquats to canola oil on a 24-7 basis is daunting to say the least.
But it also has some perks for grocers, profits from sales of sugar being one of them.
In years past, China’s subsidy of choice was a stockpiling program that helped manipulate domestic prices – not just in sugar but for other crops like cotton, too.
Reforms appear to be forthcoming.
Sugar is the world’s most distorted commodity market and increased government involvement is fueling inefficiency, according to a new video released today by the American Sugar Alliance (ASA).
U.S. sugar producers have filed new subsidy allegations in their countervailing duty case against Mexico’s sugar industry, including evidence that export subsidies are fueling a flood of Mexican sugar shipments and injuring U.S. sugar farmers and processors.
The U.S. Department of Agriculture reported in June an alarming fact about global sugar production. Apparently, most sugar producers outside of the United States are getting less and less efficient.
In its latest acreage report, USDA notes that acres of both sugarbeets and sugarcane are down this year – 1.7% and 3.5% respectively.
Since Mexico began flooding the U.S. market with dumped and subsidized product, U.S. prices have fallen, costing U.S. producers an estimated $1 billion on this crop alone. This depressed business environment is leading to contraction by efficient U.S. producers while inefficient Mexican producers seize more and more market share with the aid of unfair trade.
Her motto has been “Life isn’t a bowl of cherries – it is a bunch of raisins: raisin’ cane, raisin’ kids and raisin’ hope for a better tomorrow.”
India is second only to Brazil when it comes to producing sugar. And following all of the sugar subsidy announcements coming out of the country this year has been akin to watching a yo-yo.
Mexico had agreed to redirect shipments of subsidized sugar to other countries instead of the United States. But it is doing the exact opposite of what it promised. Mexico is actually accelerating exports of subsidized sugar to the U.S. and further injuring U.S. sugar producers.
We wanted to take a moment to thank the 32 members of the Appropriations Committee who stood with America’s sugar farmers. In particular, we wanted to spotlight the four appropriators who made impassioned speeches against Big Candy’s power grab.
“This action was expected and very much in order considering Mexico’s complicated web of sugar subsidies and the fact that Mexico’s government owns a large chunk of the industry,” said Phillip Hayes.
Why are Big Candy lobbyists continuously complaining about sugar farmers and crying poor on Capitol Hill? All the evidence suggests that Candy is King.
The U.S. House Appropriations Committee today reaffirmed lawmakers’ support of the sugar policy included in the 2014 Farm Bill by rejecting an amendment designed to weaken that policy and leave Americans more dependent on subsidized foreign sugar.
In case you’ve forgotten, May marks the 72nd anniversary of sugar rationing in this country. Sugar was the first crop rationed in 1942, and it was the last commodity removed from the rationing list five years later. Back then, America didn’t have a nationwide domestic sugar industry and the Western States relied on shipments from the Philippines and Hawaii. But the Japanese conquered the Philippines and ships in Hawaii normally used to ship sugar were needed for the war effort.
Here are a few attention grabbers about the record amount of subsidized sugar Mexico dumped onto the U.S. market last year.
- Mexico sent an all-time high 2.1 million tons of sugar to America in FY2013. For perspective, that’s enough to supply every person in the U.S. with 13 pounds of sugar.
- This was up from 1.1 million tons the year earlier and marked a doubling of Mexico’s share of the U.S. market from 9% to 18%.
- The resulting price decline—U.S. prices have fallen 50% since the end of 2011—will cost U.S. producers $1 billion this year.
- The USDA was forced to spend $278 million in taxpayer money to keep the market from collapsing under the weight of Mexico’s dumped sugar.
- Mexico’s government, which owns and operates 20% of the Mexican sugar industry, is the country’s biggest producer and exporter of sugar.
The fact that an inefficient industry largely controlled by the government strengthened its foothold in America at the expense of U.S. farmers and U.S. taxpayers is alarming. But apparently, it’s just the beginning.
New USDA data show that Mexico is dumping sugar at an even faster pace this year than last. In fact, the 1.3 million tons that has arrived in the first seven months of FY2014 is 48% higher than over the same period the year prior.
Apparently, Mexico has been dumping more than just sugar on the U.S. market, and has been jeopardizing more than just sugar jobs.
It has been about one week since the U.S. Department of Commerce (DOC) launched a formal investigation into the unfair trading practices of Mexico’s sugar industry, noting strong evidence of significant dumping and actionable subsidies. Yet, a group of lobbyists from the candy, corn refining, and Mexican sugar industries are angling to influence what is…
The U.S. Department of Commerce (DOC) today announced that it would initiate an investigation to determine if the Mexican government has subsidized Mexico’s sugar production and whether that sugar is being dumped into the U.S. market. A group of U.S. sugar producers filed antidumping and countervailing duty petitions against Mexico’s sugar industry on March 28, and they applauded DOC’s decision. “It is clear that the petitions have merit in the eyes of the U.S. government,” said Phillip Hayes, a spokesperson for the American Sugar Alliance. “Considering what’s currently happening in the market, we are hopeful that corrective action will be taken as soon as possible.”
India certainly got the international community’s attention when it recently announced a slew of new sugar subsidies, including a direct export subsidy that is likely against World Trade Organization (WTO) rules.
Brazil was so enraged that it demanded the elimination of India’s new sugar programs at a recent WTO meeting. Then Brazil promptly announced a new government handout of its own.
America’s sugar producers today asked the United States government to take corrective action against Mexico’s sugar industry for dumping subsidized sugar onto the U.S. market and inflicting harm on U.S. growers and taxpayers.
The antidumping and countervailing duty petitions filed with the U.S. International Trade Commission and U.S. Department of Commerce allege that the Mexican industry has shipped sugar to the United States at dumping margins of 45 percent or more and has received substantial subsidies from Mexican federal and state governments.
For years, it’s been difficult for lawmakers to learn about confectioners’ economic success. That’s because candy lobbyists are too busy telling Congress that sugar policy has caused them financial harm. Now Capitol Hill has a place to go for Big Candy’s Big News. The American Sugar Alliance released a new website this week that will keep track of…
Earlier this year, Congress overwhelmingly agreed to extend U.S. sugar policy for another five years. Strong support for sugar policy by leaders in the agricultural community certainly helped make that decision easier for lawmakers.
And don’t look for that support to wane anytime soon. Just last week, the National Farmers Union held its annual conference and adopted its policy positions for the upcoming year. When it comes to sugar policy, NFU reaffirmed its support:
A February article by Bloomberg noted that the glut of unneeded sugar holding down prices isn’t likely to subside anytime soon. As the news service put it:
The global sugar surplus will extend to a fifth year as government support and weakening currencies in producing countries partly make up for lower prices.
This week, the National Confectioners Association (NCA) is hosting its annual State of the Industry Conference at the Fontainebleau Resort in Miami Based on the news pushed out by NCA recently, conference attendees will likely hear that the state of the candy industry is strong. Ironically, they’ll also probably hear from industry lobbyists that sugar…
With a strong five-year sugar policy at their side, U.S. sugar producers are now setting their sights on addressing the foreign sugar subsidies that make U.S. sugar policy necessary. That’s according to Jack Roney, director of economics and policy analysis for the American Sugar Alliance (ASA), who spoke today at the USDA Agricultural Outlook Forum. “U.S. sugar producers are among the most efficient in the world, and we would thrive in a global free market, if one existed,” he explained. “But historically, sugar has been and continues to be the world’s most distorted commodity market because of foreign subsidization. Something must be done about it.”
This Friday is Valentine’s Day, and chances are good that Big Candy lobbyists will use the holiday as an excuse to bash U.S. sugar policy on Capitol Hill. They will claim that current sugar policy has harmed them financially, which is why Congress should outsource domestic production to heavily subsidized foreign producers. But these same…
President Barack Obama today officially signed the 2014 Farm Bill, and with it, continued America’s current sugar policy for another five years. Sugar producers applauded the new law, which overcame tremendous obstacles to ultimately unite leaders from both political parties.
The sugar industry also noted its appreciation for the signing ceremony being held in Michigan, which is home to Senate Agriculture Committee Chairwoman Debbie Stabenow (D)…
In the world of cotton, China is well known for its massive government-run stockpiling program. This program, one aim of which is to keep prices inflated for Chinese growers, has led to uncertainty in the world market, and is compounded by other subsidies to its cotton farmers. Seems China’s sugar sector is pursuing similar policies.…
The curtain has officially closed on 2013, and by any definition, it was a sensational year for America’s candy makers. Sales were up. Profits were high. And companies announced numerous expansion projects. Now based on new data by Yahoo!Finance, we realize just how profitable things have been. Confectioners check in at an amazing 12.3% profit…
The American Farm Bureau Federation, the nation’s largest agricultural trade group, is holding its annual convention this week where members will discuss policy priorities. The Farm Bureau has been a strong supporter of U.S. sugar policy over the years and was instrumental in beating back recent policy attacks by big candy companies that sought to…
U.S. sugar producers have publicly backed a “zero-for-zero” sugar policy, which would promote an end to global sugar subsidies in favor of a free market. Meanwhile, foreign sugar producers have been busy ratcheting up their subsidies and artificially manipulating global prices. The latest example comes from India, the world’s second biggest sugar producer and third…