Each month, the USDA posts updated sugar pricing information on a website it has dryly titled “Sugar and Sweeteners Yearbook Tables.” The site itself is a bit of a labyrinth, with more than 60 tables tracking production, price, and consumption data. But if you know where to look, the site can be a wealth of information.
For example, the most recent sugar price updates, posted July 7, show that the price of refined sugar in the United States and the heavily subsidized world market converged last month. In other words, when Big Candy complains about paying twice as much for sugar in America than on the world market, they aren’t exactly being forthcoming.
Here’s how the new data stack up. According to table 5 on the site, U.S. sugar companies asked food manufacturers to pay, on average, 29.75 cents per pound of sugar during the month of June. Bear in mind, this is the “asking” price and may not reflect the actual price at which sugar was sold. Much like buying a car, the final price can be a lot lower than the initial asking price.
That U.S. price also includes a lot of extras built in, such as storing the sugar until the buyer needs it and the ability to transport the sugar to the buyer at exactly the time it’s needed. World sugar prices don’t include those perks, so to compare apples to apples, six cents per pound must be added – the cost of shipping sugar from the world market to the United States.
According to USDA table 2, which tracks the final price at which sugar was sold on the world market, buyers spent 23.96 cents per pound of sugar in June – or 29.96 cents once you’ve added in the cost of shipping the sugar to the buyer.
Put another way, Big Candy would be spending more to buy sugar off the world market right now than they are spending to purchase a homegrown product made by U.S. farmers and U.S. workers.
The two tables also show historical pricing statistics, where you can quickly see that the current U.S. price (29.75 cents) is almost identical to 20 years ago (29.5 cents). Yes, there are small ebbs and flows throughout the years, but generally the historical data demonstrate remarkable stability throughout the years.
World prices, on the other hand, are all over the map. The current world price (23.96 cents) is much higher than 20 years earlier (18.00 cents), a testament to the instability that has long plagued the world market.
This market, which is made up of global surpluses, is widely considered the world’s most volatile because it is so distorted with subsidies and is thinly traded relative to other commodity markets.
The unpredictable nature of this market is exactly why the United States has a sugar policy designed to operate without taxpayer cost and keep prices stable for consumers.
So why exactly is Big Candy so bitter? Americans have predictable prices that are as low as two decades ago, a vibrant domestic sugar producing industry that supports 142,000 jobs, and a policy that doesn’t cost taxpayers a dime. Sounds like a great deal.