Sugar in the New Year

From the ASGA

Published in the February 2013 Issue Published online: Feb 05, 2013 Luther Markwart
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Each new year brings a variety of new opportunities and challenges for our nation as well as the beet sugar industry. On the political front, President Obama will have four more years to lead our nation. He knows full well that leading a politically divided and polarized nation is no simple task.

In the Senate, the Democrats continue to control with a margin of 55 (53 Dems + 2 Independents) to 45 Republicans. In the House, the likely split is 234 Republicans to 201 Democrats. While the nation still has a comfortable assurance that the political checks and balances are in place to protect from a one-party dominance of Congress and the White House, it is also clear there should not be unnecessary delays in doing work that is critical to our nation. One message from the last election was clear: voters are fed up with the political bickering while the nation's fiscal house is in complete disarray. It has been 18 years since all of the appropriations bills have been passed by the Congress on time and in regular order. Both parties know what they must do with regards to cutting costs and raising revenues, and they must do it together. This is a time for courageous and bold leadership from both parties to make sure the future course of our nation is on solid footing.

From a beet sugar industry standpoint, there are a number of challenges in the year ahead.


The Farm Bill: As of this writing (Nov. 21), the fate of the 2012 Farm Bill remains uncertain. Hope still remains that the farm bill will be part of a larger package that will help reduce the deficit. The farm bill could provide a savings of about $30 billion over 10 years, which would be very attractive in cutting government spending. If the farm bill was not dealt with in the lame duck session, then the current bill would need to be extended, and we would have to start all over again in 2013 to craft a new bill. Given the work already done on the bill in 2012, it is best to get this important piece of legislation behind them and move on to other pressing matters.


The Market: With a record 35-million-ton beet crop, a good cane crop and a large crop in Mexico, we have a North American market that is awash in sugar. Both raw and refined sugar prices have collapsed and are moving closer to the forfeiture range.

Part of the problem is that the USDA increased imports by 420,000 tons last April based on bad data. I can assure you your industry leaders understand the magnitude of the problem and are working with the USDA to address it. As we know, it is easy to add sugar to a tight market, but it takes a long time to bring an over-supplied market back into balance. Our industry has had a very good working relationship with the USDA on a variety of important issues (sugar program administration, biotechnology, crop insurance, etc.) and we look forward to working with them over the next four years.

 

Biotechnology: On Nov. 15, 2012, the Ninth Circuit Court of Appeals denied the appeal by the Center for Food Safety and other plaintiffs and affirmed the decision of the United States District Court for the Northern District of California to dismiss as moot the case concerning permits for the planting of sugar beet stecklings (seedlings) that were genetically modified to tolerate labeled applications of Roundup agricultural herbicides. This decision was made after a number of legal proceedings.

This brings an end to the series of four lawsuits and two appeals for sugarbeets over a five-year period that began in January of 2008. A ballot initiative in California (Proposition 37) to require labeling of any food that was biotech or contained an ingredient from a biotech plant was defeated by a margin of 53 percent to 47 percent. Similar efforts by biotech opponents are being planned for Washington State, Vermont and Connecticut. The agriculture community is working together to address these and other issues to preserve this important technology.

As I do each year, I strongly remind growers to continue their outstanding record of stewardship measures to remove bolters, rotate crops and use other modes of action in their herbicide applications where it is appropriate.

Trade Agreement: The Obama Administration is hopeful to conclude the 11-nation Trans Pacific Partnership by October 2013. This is critically important to our industry to make sure the provisions in this agreement do not allow for new additional imports from Australia. The rules put in place are critical to address any future additions of major sugar exporting countries like Thailand. Our market cannot absorb more sugar imports without devastating our domestic industry. This will be one of our highest priorities in 2013.

 

2013 ASGA ANNUAL MEETING: Grower leaders from across the country will gather to get the latest information on what the election means for the future of U.S. agriculture and sugar policy. We will examine the legislative agenda, politics and priorities in the 113th Congress; the operation of sugar policy under the 2008 Farm Bill and the provisions of the 2012 Farm Bill; biotechnology; an update on the U.S.-Mexico sugar market; and other topics that will take center stage at the Annual Meeting in San Diego, Feb. 3-5. It is a meeting that no grower or industry supplier should miss. You can see the program, register for the meeting and make hotel reservations online at www.americansugarbeet.org. If you need other information, call the DC office at (202) 833-2398.