U.S. Can’t Get Enough Sugar For Dum Dums With Import Curb

By: Luzi Ann Javier and Marvin G. Perez

Spangler Candy Co. saw last month just how tight and costly U.S. sugar supplies are. For the first time in at least 38 years, the company couldn’t get the sweetener it needed to make Dum Dum Pops and candy canes.

When a power failure halted shipments from Spangler’s main supplier, Chief Executive Officer Kirk Vashaw scrambled to find alternatives. He came up 25 percent short, forcing a cut in candy output at the Bryan, Ohio-based company his family has run for four generations. Sugar is 70 percent of his ingredient costs. While the disruption lasted a day, Vashaw says inventory is getting tighter than when prices surged to a record in 2010.

U.S. food companies can’t get enough sugar even as the world heads for a fifth straight year of surpluses. Imports are restricted by tariffs first imposed two centuries ago to protect cane farmers, and a trade dispute is slowing deliveries from Mexico, the top foreign supplier. The gap between U.S. and world prices reached the widest in two years, adding to costs for buyers including Hershey (HSY) Co. that already are charging more for candy to cover increases in cocoa and dairy products.

“There’s not a lot of sugar to sell right now,” said Frank Jenkins, the president of South Norwalk, Connecticut-based JSG Commodities, the largest U.S. sugar broker. “We’re going to need to increase imports, otherwise we’re going to run out of sugar or prices will continue to rise.”

Read the full article here.

Big Sugar Has Finally Gone Too Far

The Hill
Blog Post By: Thomas Schatz, President, Citizens Against Government Waste

The latest example of Big Sugar running to Uncle Sugar to protect the industry’s sweet deal at the expense of taxpayers and consumers occurred on March 28, 2014, when domestic sugar producers filed complaints about Mexican sugar imports to the U.S. International Trade Commission (ITC) and the Department of Commerce (DOC). The petitioners claim that Mexican sugar is being dumped in the U.S. market and receives unfair subsidies from the Mexican government, thereby injuring U.S. sugar producers.

While the agencies have agreed to investigate the two complaints, which is a routine decision in such cases, it would be an insult on top of injury to both taxpayers and consumers if they rule in favor of Big Sugar.

Read the full blog post here.

Sugar Shakedown: How Politicians Conspire with the Sugar Lobby to Defraud America’s Families

Heritage Foundation
By: Mario Loyola

The sugar program, a government-created cartel administered by the U.S. Department of Agriculture (USDA), costs consumers an estimated $3.5 billion annually and has reduced employment by more than 127,000 jobs since 1997. Through production and import controls, the USDA shifts the cost of the program in the form of higher prices to consumers, which also allows supporters in Congress to claim that the program costs nothing to the federal budget. Congress should reform or eliminate the sugar program and require the Congressional Budget Office to assess the real economic costs and benefits of all price-support programs.

Read the full analysis here.

Trade Groups Weigh in Against Sugar Negotiations

POLITICO Influence
By: Byron Tau

In a Tuesday letter to Commerce Secretary Penny Pritzker, Agriculture Secretary Tom Vilsack and USTR Michael Froman, a number of major trade associations urged the Administration not to enter negotiations with Mexico on a managed trade agreement in response to antidumping complaints filed by U.S. sugar producers. Among the signers were the Coalition for Sugar Reform, American Bakers Association, American Beverage Association, American Frozen Food Institute, Chicago Area Retail Bakers Association, Competitive Enterprise Institute, Council for Citizens Against Government Waste, Food Marketing Institute, Grocery Manufacturers Association, Independent Bakers Association, International Dairy Foods Association, National Confectioners Association, National Foreign Trade Council, National Consumers League, Retail Bakers of America, Snack Food Association, Sweetener Users Association and the U.S. Chamber of Commerce.

Read the full article here.

U.S. Sugar Users Oppose Efforts to Broker Mexico Trade Deal

By: Chris Prentice

U.S. food manufacturers and sugar users have urged top U.S. government officials to reject pressure to negotiate a trade deal with Mexico to end a months-long dispute over allegations of cheap sweetener imports from across the border.

In a letter sent on Tuesday, groups representing candy makers, soda companies, and other food manufacturers said any move to restrict imports could incite retaliation from Mexico on other products, undermine free trade across the continent under the North American Free Trade Act, and threaten over $220 billion in U.S. exports to Mexico.

Read the full article here.

Sugar Users Urge No Restrictions on Mexico Trade

Food Business News
By: Ron Sterk

The Coalition for Sugar Reform and 17 other industry and consumer groups in a July 15 letter urged the U.S. government not to enter negotiations with Mexico on a managed trade agreement in response to the trade dispute between U.S. sugar producers and the Mexican sugar industry.

“We have heard troubling rumors about pressure being applied on the administration to consider the negotiation of a managed trade agreement between the governments of Mexico and the United States to resolve the antidumping and countervailing duty petitions filed against U.S. imports of sugar from Mexico,” the Coalition said in its letter to U.S. secretary of agriculture Tom Vilsack, U.S. secretary of commerce Penny Pritzker and U.S. Trade Representative Michael Froman.

Read the full article here.

U.S. Trade Policy Gouges American Sugar Consumers

The Heritage Foundation
By: Bryan Riley

Abstract: Tariffs and quotas protect U.S. sugar producers from competition by making it costly for American consumers to import sugar from other countries. U.S. sugar producers recently asked the government to impose tariffs on sugar imported from Mexico. They allege that Mexican producers have been “dumping” sugar in the U.S. market at unfairly low prices, even though those prices were higher than the average world price for sugar. Americans already pay inflated prices for sugar as a result of the U.S. sugar program. The best policy is to eliminate U.S. trade barriers and stop gouging sugar consumers.

Read the full backgrounder here.

Sugar Fight Ain’t So Sweet

USA Today
Column By: Ike Brannon, Former Chief Economist, House Energy and Commerce Committee, and Current Fellow, George W. Bush Institute

American sugar producers have one sweet deal. Under what’s euphemistically called the “sugar program,” they keep out foreign competitors through high tariffs, prop up domestic prices with crop allotments and backstop their risk through government-guaranteed loans. Attempts to strip Big Sugar of some of its unique protections in the recent Farm Bill were defeated by a coalition of members of Congress from the Southern states producing cane and the beet-sugar-producing states in the Midwest and West.

The sugar program, says the Department of Agriculture, supports U.S. sugar prices above comparable levels in the world market. That’s an understatement. Last year, our government spent $259 million directly to keep sugar prices high, and U.S. consumers paid an even higher tax.

Read the full column here.

Sugar Users Cite C.B.O. Forecast of Sugar Program Costs

Food Business News
By: Ron Sterk

The Coalition for Sugar Reform cited the Congressional Budget Office’s April 2014 Baseline for Farm Programs as further reason to change the U.S. sugar program.

“The sugar producers’ claim over the years that the U.S. sugar program operates at ‘no net cost’ is clearly false, as it has been for some time,” said the Coalition, which represents sugar users.

The C.B.O. forecast the sugar program will cost $629 million between fiscal year 2014 and 2024, with the biggest chunk of that, $238 million, forecast for 2014. Costs were forecast at an average of $39.1 million annually in subsequent years.

The U.S. Department of Agriculture paid about $259 million for sugar industry loan forfeitures and other supports in fiscal 2013. It was the first time in nearly a decade that the U.S.D.A. had incurred costs in the sugar program.

Read the full article here.

Are Sugar Tariffs Raising the Cost of Your Easter Basket?

Heritage Foundation’s The Foundry
Blog Post By: Tori Whiting and Michael F. Mo, Members, Young Leaders Program, The Heritage Foundation

Easter has arrived, and so has everyone’s favorite bunny rabbit. While kids are excited about their chocolate bunnies, Peeps, and jelly beans, parents continue to pay more than they should, and the U.S. government is to blame. Since the Great Depression, import quotas, tariffs, and subsidies for domestic sugar producers have made the price of sugar in the U.S. higher than the average world price.

Each year the government establishes import quotas to prevent the U.S. from importing “too much” sugar from other countries. After the quota is met, refined sugar imports are penalized with a tariff of 16.21 cents per pound. This means that box of Peeps the Easter Bunny left—along with everything else that contains sugar—actually costs more than it should. Because the quota drives up the price of sugar, extra money goes into the pockets of U.S. sugar producers at your expense.

Read the full blog post here.