SEATTLE — Sugar producers and users found common ground in discussing provisions of the US sugar program and sugar provisions in the House and Senate agriculture committee versions of the new farm bill during an Aug. 6 session at the International Sweetener Symposium.    

Randy Green, principal, Watson Green LLC, representing US sweetener users, called the proposed farm bill “responsive and positive,” and one that may result in more American-produced sugar. The farm bill, referred to as the Farm, Food and National Security Act of 2024, contains the US sugar program, which is administered by the US Department of Agriculture. Language in the House and Senate agriculture committees’ versions of the proposed farm bill was seen as favorable for both sugar users, represented by the Sweetener Users Association (SUA), and for sugar producers, represented by the American Sugar Alliance (ASA), which is the sponsor of the Symposium.

“The users view this as a pretty balanced package,” Green said. “It seems to us that the committees have been responsive to the needs of both growers and users. From our members’ (SUA) standpoint, we want a prosperous domestic sugar industry. That’s good for us, and good for you (producers). We would like to see the domestic sugar industry expand. Our members (SUA) like domestic sugar, but we still need imports. It doesn’t seem we are going to be totally self-sufficient.”

Randy Green, principal, Watson Green LLC; consultant, Sweetener Users Association.
Source: Sosland Publishing Co. 

The ASA continues to assert that a stronger sugar policy would better reflect current economic realities, vital to ensuring that American sugar beet and sugar cane farmers and workers can continue to grow and refine the sugar crops that supply American food manufacturers.  

Both the Farm, Food and National Security Act from the House Agriculture Committee earlier this year, and the Senate agriculture committee farm bill proposals include provisions that will provide additional financial security (a safety net) to sugar producers as well as implement technical updates to provide more sugar to the market earlier in the year for sugar users.

“Growing the food we eat has become significantly more expensive,” Rob Johansson, director of economics and policy analysis at the ASA, said during the same symposium session. “The commonsense improvements to sugar policy put forward by both the House and Senate better reflect the economic realities of planting, cultivating, harvesting and refining sugar beets and sugar cane. That will ensure our farmers and workers can continue providing SUA members with American-made sugar, while lessening our dependence on foreign countries for this essential ingredient.”

Domestic sugar production fulfills about 75% of America’s sugar needs, even though the sugar program allows up to 85% of US sugar needs to be met by domestic sugar. Mexico typically is the major sugar exporter to the United States, with more than 40 other countries receiving tariff-rate quotas (TRQ) under World Trade Organization agreements that carry low import duties. US sugar refiners and end users also import sugar under certain free trade agreements, and import high-tier sugar, which has no volume or country limits but maintains a high import duty.

“Current market demands, in conjunction with low tariffs that have not risen with inflation for nearly 30 years, have led to additional sugar entering the US market from the world market,” Johansson said. “This demonstrates the flexibility of US sugar policy. USDA has administered the US sugar program in a way that ensures the market is adequately supplied with sugar and the global market has supplied more when needed.”

However, both Green and Barbara Fecso, who manages the US sugar program at the USDA, pointed to the challenges presented this year by an ongoing supply shortage from Mexico due to drought that resulted in a record amount of high-tier imports, topping one million tons.

Fecso said some refiners have opted to import high-tier sugar if they can get it at the same price as domestic sugar rather than wait on the USDA to go through the lengthy process of increasing TRQ imports that carry lower duties. She said the sugar program works as a tool to support domestic sugar producers while ensuring an adequate supply for sugar users. She added that the forecasting of annual high-tier imports in the USDA’s World Agricultural Supply and Demand Estimates report becomes a self-fulfilling prophesy, limiting duty-dree exports from Mexico and the need for the USDA to increase the TRQ.

Green noted that although the US sugar ending stocks-to-use ratio has been within the USDA target range of 13.5% to 15.5% since 2020-21, it would have fallen below the minimum 13.5% without high-tier imports that made up more than half of ending stocks in some cases, and which could have been supplanted with lower-priced TRQ imports if the USDA has increased the TRQ in a timely manner.