2014 was a step in the right direction for Idaho sugarbeet growers, with cash receipts increasing by 9 percent and rising sugar prices returning the first profit in three years.
“We had the best-yielding crop in history and the highest sugar content in the last 25 years,” said Duane Grant, chairman of the Snake River Sugar Co., a co-op that owns the Amalgamated Sugar Co.
Thanks to favorable weather, the 850 co-op members benefited from an unusually high average of 17.2 percent sugar content in their beets, a level usually only achieved in eastern Idaho. That made the beets worth more. More than 800 co-op members farm in Idaho.
While growing conditions buoyed Idaho growers in the short term, a shift in international trade gives U.S. sugarbeet and sugar cane growers hope for more-permanent price improvement.
A trade group representing U.S. sugar companies petitioned the International Trade Commission in March, alleging that Mexico sugar producers were deliberately driving U.S. prices down by selling sugar below the cost of production.
Last year, Grant painted a bleak future for the U.S. sugar industry if the ITC didn’t take action against Mexico.
The trade commission’s preliminary findings agreed with the coalition’s assertion and led to duties on Mexico sugar producers. A final decision is expected in March.
Grant said the duties have raised prices above production costs for U.S. growers. A similar final decision, he said, would save a U.S. industry that was on the brink of extinction.
“It’s not an overstatement,” he said. “If the resolution is as it has been proposed, that’s a resolution that the U.S. industry can survive with.”
The co-op paid an undisclosed amount to members over the last two years from its reserve fund to make up for losses on sugar beets. The co-op was spared that expense this year with profits returning in 2014.
“You can only eat into those reserves so far,” Grant said.
But another problem will continue to dog domestic producers, University of Idaho agriculture economist Garth Taylor said. Sugar futures price U.S. sugar are nearly 60 percent higher than the world market, according to the Wall Street Journal.
In response, Taylor said candy makers and other industrial sugar users may continue relocating production to Mexico, where sugar is cheaper.
“There’s still companies that use sugar that are leaving the United States because of this,” Taylor said.
Source: www.idahostatesman.com