FOR IMMEDIATE RELEASE: August 7, 2017
CONTACT: Phillip Hayes, 202-271- 5734 (cell)
From the International Sweetener Symposium:
SAN DIEGO — U.S. sugar prices plummeted after Mexico broke U.S. trade law and dumped subsidized sugar on the market in 2013 and 2014 – from 43 cents per pound in 2012 to less than 29 cents when the U.S. and Mexican governments finally struck a deal this June to stop the trade abuses.
Despite nearly 5 years of declining prices, makers of candy, cakes, cookies and other sweet treats never lowered prices for grocery shoppers, according to an analysis of food pricing data rolled out this week at the International Sweetener Symposium.
In fact, the price of most sweetened foods increased, creating an economic windfall for confectioners and other food manufacturers. Candy bars, for example, increased from $1.39 to $1.49 over that time, based on the survey of grocery store prices conducted annually by the American Sugar Alliance (ASA).
And it’s not just candy bars. Cake mix rose from $2.09 to $2.69, gelatin jumped from $1.49 to $2.09, and a carton of ice cream climbed from $4.99 to $6.29.
“Sugar costs less in America today than it did in the 1980s,” explained Jack Roney, ASA’s economist. “Compare that to a candy bar, which is now four-times more expensive than it was back then.”
Roney said it’s understandable that food prices increased to keep pace with additional labor, transportation, and regulatory costs. However, he said, sugar producers face these same economic pressures but are unable to simply raise prices to offset the added costs.
“Farmers are price takers, not price makers,” he explained, “We’ve had to maximize efficiencies, invest in new technologies, and vertically integrate to keep pace with inflation.”
The fact that consumers didn’t see any savings on their grocery bills while Mexico was deflating the U.S. sugar market is particularly noteworthy with the looming Farm Bill debate, Roney said.
“Big candy companies are lobbying Congress to let subsidized foreign sugar flood the market to displace U.S. production and drive down prices further,” he noted. “They claim cheap sugar will benefit grocery shoppers, but history shows that food manufacturers are unwilling to share their savings with consumers.”
Confectioners, and others angling for more subsidized foreign sugar, will have an uphill climb.
Congressional leaders, and America’s two biggest farm organizations, are big supporters of U.S. sugar policy, which is designed to help stabilize the market and buffer domestic growers against foreign subsidization. In fact, the Chairman and Ranking Member of the House Agriculture Committee, and the presidents of the American Farm Bureau Federation and National Farmers Union, are expected to endorse U.S. sugar policy at the International Sweetener Symposium this week.
