American Sugar Cane League: Statement on Gustav

Statement of Jim Simon, General Manager of the American Sugar Cane League (ASCL): There is certainly damage to the crop, but it is much too early to tell the extent of the damage. Many areas are without power and potable water. Some farmers from the hardest hit areas are hopeful that they will be able to return to their homes Friday afternoon. Rain continues to fall on the region, triggering flash-flood warnings and making it more difficult to get a good read on root conditions. Cane that was pushed over is going to need 10-14 days to stand up and sunshine will help speed that process. In short, it will take some time to determine the hurricane's actual impact on our industry. What is clear is that the costs of harvesting our cane will increase sharply, beginning with the cane that is harvested and re-planted on idle acreage. Because of the rainy weeks that preceded Gustav, we only had approximately 15 percent of the new cane planted before the storm, so farmers will be working to complete the bulk of their planting in less-than-ideal conditions, which will drive up the fuel component of their planting costs. Harvesting twisted cane, for re-planting or for delivery to raw sugar processors, requires farmers to slow the harvesters down, which will increase the fuel costs and time requirements for each acre harvested. Statement of Jack Pettus, ASCL's Vice-President of Government Relations: Prior to the storm, we estimated that farmers needed a 4 cent increase in the price of raw sugar to offset (1) fuel-related increases in cultivation, planting and harvest costs, (2) higher fertilizer costs and (3) wage increases. These calculations did not include the dramatically higher input costs our growers will now bear because of the hurricane damage. Keep in mind that these costs will rise regardless of the amount of sugar that is extracted from the harvested cane. Even at 24 cents per pound, raw sugar prices have not kept up with input price increases. With the certainty of even greater input costs this fall as a result of hurricane damage, our growers hope that government officials will take time to gain an accurate assessment of the losses before considering any action that could drive the raw price down. Escalating input costs and falling raw prices at this juncture could do more damage to the Louisiana sugarcane growers than Gustav's direct impact on actual sugar production.