Why Those Halloween Candy Treats Are So Expensive

The Daily Signal
Commentary By: Preston Turner, The Heritage Foundation

Excerpt: “Your Halloween candy is costing you more than it should—because of a government program.

“For decades, the federal sugar program has artificially kept the price of sugar excessively high. According to the most recent data from the U.S. Department of Agriculture, it cost 37.5 cents to buy a pound of wholesale refined beet sugar in the United States, yet it only cost 19.2 cents for a pound of refined sugar on the world market.

“Yearly fiscal data tell a similar story. From 2000 to 2014, the average price for a pound of wholesale refined beet sugar in the U.S. was 32.5 cents. The average price for a pound of refined sugar on the world market was just 17.5 cents.”

The full piece can be found here.

Why the Sugar Program Should Be Eliminated

The Daily Signal
Commentary By: Daren Bakst and Bryan Riley, The Heritage Foundation

Excerpt: “Rep. Ted Yoho, R-Fla., has introduced a resolution that allegedly would eliminate domestic sugar subsidies after numerous other countries got rid of their subsidies.

“This ‘zero-for-zero’ plan, which has been pushed by U.S. sugar growers, is based on a seriously flawed premise: that the United States shouldn’t eliminate damaging economic policies if other countries have similarly self-destructive policies.

“Subsidies are bad policy regardless of what other countries do. They can distort markets, increase costs to consumers and taxpayers, reduce competition and discourage innovation, among other things.

“The U.S. sugar program is no exception. Under this program, the federal government tries to control how much sugar can be sold in the country through price guarantees, marketing allotments that limit how much sugar processors can sell each year and import restrictions that reduce the amount of imports.”

Read the full piece here.

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.