Farm Policy Experts Note Rising Costs of Producing Sugarbeets and Sugarcane

In a recent Southern Ag Today article, two well-respected professors looked at the rising costs of production for sugarbeet and sugarcane farmers. Their analysis, which is a timely addition to the upcoming farm bill discussions, is in stark contrast to the non-treatment of this important issue by GAO in a recent report purportedly on the U.S. sugar market.

“Drs. Diliberto and DeLong examined how inflation has increased the cost of planting, cultivating, and harvesting sugarbeets and sugarcane since the last Farm Bill,” said Rob Johansson, Director of Economics & Policy Analysis at the American Sugar Alliance. “Knowing how much those costs have changed is important to know when looking at crafting a new farm bill that addresses the needs of producers today. It is unfortunate that the GAO, when writing their report for Congress over the past two years, considered neither the costs of producing sugar nor the high labor and environmental standards in America compared to other sugar producing countries.”

The authors found that the costs of growing sugarbeets and sugarcane have “drastically increased” by more than 30% since the last farm bill. The breakeven price to cover sugarcane production in Louisiana was found to be 28.2 cents/pound, far beyond the 17.2 cents/pound from 2018.  And the breakeven price for sugarbeet production in Minnesota/North Dakota was found to be roughly $52 per ton of sugarbeets up from $40 per ton at the writing of the last farm bill.

This Southern Ag Today article, as well as the article on November 30, Evaluation of the Recent Government Accountability Office Sugar Program Report, underscores the necessity for a more balanced and comprehensive understanding of U.S. sugar policy.

The insights from these farm policy experts spotlight critical research studies overlooked by the GAO, including: How does the financial performance of sugar-using firms compare to other agribusinesses? An accounting and economic profit rates analysis; Factors Affecting Sugar-Containing-Product Prices; The impact of US sugar prices on the financial performance of US sugar-using firms; Economic Impact of the U.S. Sugar Industry; and the Sales and Costs of Confectionery Industries in North America.

The American Sugar Alliance is grateful that research at Louisiana State University and the University of Tennessee-Knoxville continues to inform decision-makers on agricultural production here in America and key farm bill considerations.