Sugar Producer

March 2013

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1,800 U.S. Price Changes Since 2010: Wholesale Sugar Down 47% but Retail Sugar and Sweetened Products Up U.S. Sugar Imports from Mexico, 1994/95-2012/13 - Thousand metric tons, raw value - August 2010 = 100 Percent 120 1,549 1,600 Retail Refined Sugar Ice Cream 110 1,400 1,272 1,259 1,200 Cereals & Bakery Products 100 972 1,000 800 732 711 630 Candy & Chewing Gum 90 80 Wholesale Refined Sugar 600 70 Food manufacturers and retailers do NOT pass savings on lower producer prices along to customers 400 60 200 0 109 8 7 24 28 27 28 140 124 10 10 54 50 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 Source: Wholesale sugar - USDA. Retail products - Bureau of Labor Statistics. Monthly average prices through Nov - Dec 2012. Figure 3 We will counter the food manufacturers��� rhetoric with facts such as these: ��� The gap between U.S. and world raw and refined sugar prices is now virtually non-existent. ��� While producer prices for sugar have dropped nearly in half the past two years, retail prices for sugar and sweetened products have gone up, not down (Figure 4). Consumers, in fact, see no benefit when producer prices for sugar fall. The savings on sugar go instead to increased profits for food manufacturers. We will also remind Congress of the harsh consequences of European Union sugar policy ���reform��� in 2006���83 mill closures and 120,000 Figure 4 jobs lost, according to EU sources. U.S. legislators should be loath to emulate such an outcome. Likewise, we will remind our legislators that American consumers would not wish to emulate EU consumers��� growing dependence on a volatile world sugar market that is grossly distorted by subsidies in mega-producer Brazil and other sugar-exporting countries. �� Conclusion�� The costs associated with producing and marketing sugar have increased enormously in the United States over the past three decades, but, with the exception of 2010 and 2011, sugar prices have not. American producers remain under enormous pressure to innovate, reduce costs and further improve efficiency. In the meantime, we will work to ensure that the U.S. farm legislation continues to provide some economic safety net for American sugar farmers, and some buffer to the unfair threat of subsidized foreign sugar. n �� Editor���s Note: Jack Roney is the director of economics and policy analysis for the American Sugar Alliance.��His article was originally published in a trade publication for German sugarbeet producers. ������ 37

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