While U.S. sugarbeet and sugarcane crops are not yet harvested—and Louisiana’s flooding illustrates that anything can happen in an otherwise excellent growing year—USDA’s Economic Research Service is projecting record sugar production.
ERS is forecasting domestic raw sugar production at 9.208 million tons for 2016/17, eclipsing the high mark of 9.05 million tons established in 1999/2000. The forecast includes 5.32 million tons of beet sugar and 3.89 million tons of cane sugar.
The projections are preliminary and don’t include the potential effects of flooding in Louisiana, said Jack Roney, director of economics and policy analysis for the American Sugar Alliance.
But excellent growing conditions could result in a record year, with record production driven by yields, he said.
“Producers have always been aggressive in investing in improved seed varieties, capitalizing on practices in the field … and maximizing the efficiency of beet factories and cane mills,” he said.
Record production wouldn’t necessarily be burdensome to markets because domestic sugar surpluses can be avoided through U.S. sugar policy, which maintains a marketing allotment system. While production might be high, the forecast is within marketing allotment amounts and doesn’t imply sugar suppliers will have to hold back, he said.
The issue in domestic markets is Mexican sugar, not so much the amount but the nature of those imports. Mexico is shipping more refined sugar than the U.S. needs, he said.
Source: www.capitalpress.com