Baking Business: Senators ask U.S.D.A. for more sugar

WASHINGTON — Eight senators in a Feb. 27 letter to Secretary of Agriculture Sonny Perdue asked the U.S. Department of Agriculture to take action to ensure an adequate supply of refined sugar later in the year when shortages are expected.

“As you know, adverse weather in the midwestern and southeastern U.S. significantly depressed the domestic sugar harvest in 2019,” the letter said. “As a result, U.S.D.A. projects cane and beet sugar production to decrease 8.5% and 10%, respectively, compared to the previous marketing year. Mexico also reported depleted sugarcane crops due to unfavorable weather conditions in key sugar-producing regions. This decline in North American raw sugar production threatens to disrupt supply chains and increase prices for U.S. consumers.”

The eight senators — Pat Toomey, Jeanne Shaheen, Margaret Wood Hassan, Robert P. Casey Jr., Ron Johnson, Robert Menendez, Rob Portman and Mark R. Warner — said they were encouraged that the U.S.D.A. and U.S. Trade Representative recently took steps in increase sugar imports, but requested further action by the U.S.D.A. “to ensure an adequate supply of refined sugar is available for delivery to the food and beverage manufacturers across the U.S. that use sugar as an ingredient in their products.”

The letter continued, “Unfortunately, the impact of the looming supply crunch is already beginning to materialize,” noting force majeures declared by United Sugars Corp. and Western Sugar Cooperative in November 2019.

“Disruptions this early in the marketing year portend significant complications in the spring and summer months, considering firms higher in the supply chain are already exhausting their dwindling reserves to fulfill contractually-obligated deliveries in the short term,” the letter said. “To mitigate the logistical headaches that are already beginning to take shape, it is imperative that U.S.D.A. take steps to allow for increased imports of raw and refined sugar to satisfy demand and prevent price spikes. We ask that you increase market access not only for Mexico, but for other countries that regularly sell us sugar, albeit tightly restricted.”

The Sweetener Users Association praised the senators’ effort.

“S.U.A. applauds the leadership of Senator Pat Toomey (of Pennsylvania) and Senator Jeanne Shaheen (of New Hampshire) and the six cosigners of this letter for defending U.S. food and beverage manufacturers and the consumers who enjoy their products,” the S.U.A. said. “While we are grateful that the U.S.D.A. increased the amount of permitted sugar imports by 100,000 short tons in November 2019, the challenges that small American producers face will continue if further action is not taken to ensure an adequate sugar supply. A larger boost in refined sugar supplies is in order, given the extreme weather conditions U.S. and Mexican sugar growers confronted during the 2019 harvest. This supply shock, combined with America’s convoluted sugar policy, threatens to cause a severe spike in domestic sugar prices.”

Bulk refined sugar prices reported by Milling & Baking News currently are at seven-year highs with new supply mainly available from only one major national refiner 44c a lb f.o.b. Other cane refiners and beet processors are sold out with supplies fully committed.