A History Lesson Not Worth Reliving

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.

The Big Dump Could Get Bigger

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.

ITC: Dumped Mexican Sugar Harming U.S. Farmers, Taxpayers

American businesses and taxpayers have been harmed by the unfair trading practices of Mexico’s sugar industry, which has dumped subsidized sugar onto the U.S. market, according to a preliminary ruling today by the U.S. International Trade Commission (ITC).

U.S. sugar producers filed antidumping and countervailing duty petitions with the ITC in March claiming that Mexico’s actions will cost the industry $1 billion this year.  The petitions further noted that efforts by U.S. government officials to keep the market from collapsing under the surge of subsidized Mexican imports cost taxpayers $278 million in FY2013.