The International Trade Commission (ITC) issued a preliminary ruling in May, by a 5 to 0 vote, that U.S. sugar producers are being harmed by unfair trading actions by Mexico. And in a June 10 report, the ITC detailed the injury caused by Mexico dumping subsidized sugar onto the U.S. market.
Now, the USDA has released new data that helps further quantify some of the damage.
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.
In addition, U.S. taxpayers forked over $278 million last year as the USDA was forced to take action to keep the U.S. market from collapsing under the surge of subsidized Mexican imports. The Congressional Budget Office predicts future taxpayer expense unless market conditions improve.
Phillip Hayes with the American Sugar Alliance notes that this is the fourth consecutive year that sugarbeet plantings have fallen.
Meanwhile, Mexican producers have steadily increased their production, increasing their sugarcane area by 26% over the past four years. Mexico has also grown its share of the U.S. market from 9% in FY2012 to nearly 18% in just FY2013. And through May 31 of this year, shipments to the U.S. actually have been accelerating.
The U.S. Department of Commerce is expected to issue apreliminary ruling before August 25 about Mexico’s trading actions, and if it determines that subsidies are giving Mexico an unfair advantage, then it can impose corrective action to level the playing field.