Sugar producer-user tussle continues

Published online: Aug 15, 2014

STOWE, VT.—The continued tussle between sugar producers seeking limited imports and a safety net for producers and sugar users seeking reforms to the sugar program were obvious in speeches at the International Sweetener Symposium.

“Sugar policy is the least expensive commodity policy in the farm bill and it gives efficient U.S. producers an opportunity to compete in a global market awash in subsidization and manipulation,” said Jack Roney, director of economics and policy analysis for the American Sugar Alliance, the sponsor of the symposium.

Randy Green, principal, Watson Green L.L.C., a consultant to the Sweetener Users Association, said sugar users were seeking to change, not abolish, the sugar program, including making it more transparent.

“We assume there will be periods of surplus and tightness,” he said, which would imply times of price volatility. Sugar users will continue to seek reform of U.S. sugar policy, he said.

Green said one area of reform may involve more focus on sugar prices instead of just supply by the U.S. Department of Agriculture as it administers the sugar program. He also suggested the department could indicate whether it intended to increase imports even if an actual amount can’t be announced before April 1 under law. Another change could involve using something other than the costly Feedstock Flexibility Program to remove excess sugar from the market, which was used in an unsuccessful effort to avoid sugar loan forfeitures last year.

Roney cited increased input costs and threats to the U.S. sugar industry, including jobs, among several reasons for maintaining the current sugar program.

Barbara Fecso, director, dairy and sweetener analysis for the USDA’s Farm Service Agency, also speaking at the symposium, said the department uses the mandate and tools given by Congress to administer the sugar program and adjust sugar supplies but has no control over weather and prices. She also noted that minimum prices needed by large and small producers as well as for cane and beet producers vary.

“Stable prices are what we are trying to get,” Fecso said, noting that the department looks at whether current prices “meet the test of reasonableness.”

Fecso’s boss, USDA undersecretary for farm and foreign agricultural services, Michael Scuse, told the group the “trick is to find balance” in keeping adequate supply and avoiding wide price swings.

“The greatest area of uncertainty this year is the Mexican trade case,” he said.

That case, filed May 28 by the American Sugar Coalition, charged Mexico with dumping subsidized sugar into the U.S. market at a cost of $1 billion to the U.S. sugar industry this year. Antidumping and countervailing duty aspects of the case currently are being investigated by the U.S. Department of Commerce and the U.S. International Trade Commission with a preliminary decision from the DOC required by Aug. 25.

Source: www.foodbusinessnews.net