Two Crops, One Commodity – A Unique Policy for a Unique Industry

Real sugar is an essential and natural ingredient in our nation’s food supply that’s made from two different crops – sugarbeets and sugarcane. Both crops produce the exact same sugar on your table.   

Sugar serves a critical role in food products, adding flavor, acting as a preservative, balancing acidity, and more. 

While sugar is made from two different crops, the challenges to raise a crop and produce the sugar are often the same, from weather challenges to increased input costs to the ever-present threat of heavily subsidized foreign-produced sugar displacing domestic production.  

American sugar producers proudly supply roughly 75% of America’s needs; however, the U.S. still ranks as the world’s third largest importer of sugar. To ensure we do not become more reliant on foreign sugar supplies, we need farm and trade policies that allow our American farmers and workers to keep it sweet in America. 

U.S. sugar policy provides an important safety net while also serving as a critical defense for American farmers and workers. Congress recognizes that a nation’s ability to feed itself is fundamental and a strong U.S. sugar policy reinforces our national food security.  

Click Here to Get the Facts on U.S. Sugar Policy

Here’s how U.S. sugar policy works:

U.S. sugar policy is contained in legislation known as the Farm Bill, which comes up for reauthorization every five years. The One Big Beautiful Bill Act, signed into law in July 2025, included the most meaningful updates to U.S. sugar policy in 40 years. 

The Farm Bill authorizes the U.S. Department of Agriculture (USDA) to offer short-term loans on sugar being stored for consumers by America’s sugar producers. Since customers take delivery and pay for the sugar throughout the year, the loans provide funds for farmers to pay their bills while they wait to be paid.  

  • Sugar producers have at most nine months to pay back the loan. Because loans are repaid with interest and there are no subsidy checks, the policy is designed to operate at $0 taxpayer cost. 
  • To meet America’s sugar needs, USDA monitors the amount of sugar to be produced domestically along with sugar supplied from about 40 foreign countries given access, through trade deals, to import sugar at, or close to, duty free into the U.S. market.  
  • If demand exceeds domestic production plus expected sugar imports, market access for additional foreign sugar can be increased to meet customer needs. 
  • However, because sugar is one of the most distorted global commodity markets, U.S. sugar policy does not allow for unlimited amounts of duty-free foreign sugar to enter the U.S. market. Raw or refined sugar that is imported outside of the agreed to preferential-access levels in trade agreements is subject to additional tariffs (called “over-quota”, “tier-2”, or “high-tier” tariffs). 

Without sugar policy, American sugar farmers and workers would be at a clear disadvantage in the market, facing unlimited supplies of subsidized imported sugar, which are often controlled by foreign government policies designed to protect their own sugar industries.   

Additionally, American consumers would be subject to the whims of foreign suppliers, who often turn supplies to the world on or off depending on their domestic needs, with little regard to market conditions.  

Absent smart sugar policy, domestic sugar production would be jeopardized, putting family farms out of business, eliminating jobs in urban and rural communities, and threatening our nation’s food security.  

U.S. sugar policy is based on the common-sense notion that supply and demand should be in balance.  Congress has agreed and overwhelmingly voted to continue sugar policy in the 2008, 2014, and 2018 Farm Bills, and in the One Big Beautiful Bill Act. 

Sugar policy is designed to defend American family farmers and American sugar production jobs while ensuring food manufacturers and consumers always have a reliable supply of a high-quality, made-in-America ingredient. To ensure adequate supplies, USDA and the U.S. Trade Representative (USTR) have several tools at their disposal:  

OFFER SUGAR PRODUCERS ACCESS TO NON-RECOURSE LOANS, WHICH ARE PAID BACK IN NINE MONTHS WITH INTEREST.  

American sugarbeet and sugarcane farmers bear the responsibility of both farm and factory investments, as American sugar production is largely vertically integrated, with 100% of beet sugar processors being farmer-owned cooperatives and all sugar processors being farmer-, family-, or employee-owned companies. That comes with the added financial risks associated with the need for large-scale capital investments for processing.  

Similar to other crops and commodities, short-term government loans are also available to U.S. sugar producers. These loans must be repaid with interest nine months after being issued. The sugar loan rate is part of sugar policy in the Farm Bill. The One Big Beautiful Bill Act included the first meaningful increase to the sugar loan rate in 40 years.  If market prices crash, the sugar which is the collateral on the loan can be taken off the market by USDA to help the market rebound.  

Congress designed the sugar safety net to preserve American family farms, American factory jobs, and the production of a critical American-made food ingredient. It is a rare occurrence for a producer to default on a loan and is generally due to unfair foreign trade practices.  The last time this occurred was in 2013 when Mexico violated trade law by dumping subsidized sugar on the U.S. market. As a result, the domestic sugar industry lost $4 billion and the U.S. and Mexico entered into a new trading agreement governed by antidumping (AD) and countervailing duty (CVD) Suspension Agreements. 

In August 2025, the U.S. International Trade Commission (USITC) unanimously voted to maintain the Suspension Agreements on sugar imported from Mexico. Without these Suspension Agreements in place, the USITC found it likely that American farmers and workers would once again experience material injury due to dumped and subsidized Mexican sugar. 

LIMIT FOREIGN IMPORTS TO THOSE OBLIGATED UNDER EXISTING TRADE AGREEMENTS.  

Prior to the start of the fiscal year, USTR sets the foreign raw sugar import quotas for 40 countries at the amounts agreed to under the World Trade Organization (WTO) trade agreement. Nearly all sugar enters at, or close to, duty free.  Additionally, other trade agreements, such as CAFTA, provide for additional yearly, duty-free imports.   

However, excess foreign subsidized sugar has increasingly and rapidly penetrated the U.S. market, coming in above and beyond the quotas established by our trade agreements. The over-quota tariff rate was fixed 26 years ago and no longer presents a meaningful means of regulating the sale of foreign sugar in the United States.   

These artificially and destructively cheap foreign sugar imports are simultaneously contributing to an oversupply of sugar in the U.S. market and crashing prices during a time of rising domestic production costs. 

INCREASE FOREIGN IMPORTS TO MEET MARKET DEMAND ABSENT ADEQUATE SUPPLY  

If the U.S. market is under-supplied, USDA and USTR can increase import volumes to allow more foreign sugar to enter the U.S. market at, or close to, duty free.    

ESTABLISH MARKET ACCESS FOR DOMESTIC SUGAR PRODUCERS 

As part of the policy’s tools to meet U.S. market needs, USDA forecasts U.S. sugar consumption and allocates 85% of that amount to U.S. sugar producers. The U.S. market through trade agreements (WTO minimums, free trade agreements, and USMCA) must allow for certain levels of foreign sugar imports. The policy aims to keep American sugar production as the primary source in the U.S. market for this essential food ingredient, while balancing our trade commitments. 

U.S. sugar policy provides a reliable supply of domestically produced sugar and the flexibility to ensure that supply always meets demand, benefitting farmers, food manufacturers, and American households. 

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