As lovebirds around the world are celebrating Valentine’s Day, agricultural economists are gathering today in New Orleans at the Southern Agricultural Economics Association’s (SAEA) annual meeting not far from the old grounds of the Louisiana Sugar and Rice Exchange. One of the papers being presented at SAEA is a new study analyzing the relationship between sugar prices and the retail cost of sugar-containing-products.
Drs. Karen DeLong and Carlos Trejo-Pech, agricultural economics professors from the University of Tennessee, took the stage this morning at the SAEA meeting to present the findings from their latest study on sugar. Contrary to long-standing claims from corporate candy companies, the researchers found that the prices charged for sweetened products, such as a box of Valentine’s chocolates, are not tied to the price that food manufacturers pay for sugar.
In other words, when corporate food manufacturers source sugar at higher or lower costs, they don’t change the prices they charge consumers for their sugar-containing-products.
Drs. DeLong and Trejo-Pech are no strangers to sugar policy. They previously found that U.S. sugar prices did not harm the financial performance of food manufacturers in an independent and peer-reviewed study published in Agricultural and Food Economics.
The researchers pointed to the affordability of sugar as one factor why. Despite being a primary ingredient in the products they analyzed, sugar accounted for less than 2.6 percent of a product’s price, on average. For example, a $1.49 chocolate bar contains less than two cents worth of sugar.
“U.S. sugar policy does not harm sugar-using firms,” the researchers concluded in their most recent study, firmly rejecting the tired arguments made by corporate candy companies and farm policy critics in their attempts to gut sugar policy.
America’s sugar policies are designed to ensure that we always have a reliable and affordable supply of sugar – all at no cost to taxpayers. Those policies prevent heavily subsidized foreign producers from dumping their excess sugar on our market while maintaining America’s position as the 3rd largest sugar importer in the world. The strong supply chain for sugar built by American sugarcane and sugarbeet farmers and workers allowed refined sugar supply streams to meet the new demands for retail sugar driven by COVID-19. The American sugar industry pivoted quickly to shift 99,000 tons of sugar from manufacturing to retail consumers in the first three months of the pandemic, equivalent to about 50 million extra 4-lb bags of sugar at the grocery store.
So, this Valentine’s Day, we’re sending a love note to America’s sugar farmers and workers.
Thank you for making our Valentine’s Day so sweet. We appreciate all that you do to contribute to our local communities, the rural economy, and our national food security.
America’s sugar producers: U Rock.