The U.S. Sugar Industry

The U.S. Sugar Industry

The United States has never been self-sufficient in sugar production and must rely on imports to meet market demand each year. Here’s how the sugar industry works.

Domestic Sources

Sugar is derived from two different crops, which are grown in a handful of states:

  • Sugarcane is grown in Florida and Louisiana. After harvest, sugarcane is milled into raw sugar and then refined.
  • Sugar beets are grown in Colorado, Idaho, Michigan, Minnesota, Montana, Nebraska, North Dakota, Oregon, Washington and Wyoming. Sugar beets are processed directly into refined sugar.

Needed Imports

Because the United States does not produce enough sugar domestically, American food manufacturers depend on imports to meet consumer demands each year.

The United States imports sugar under a system of import quotas, which are also called tariff-rate quotas (TRQs). The TRQs set limits on how much sugar can be shipped to the United States every year from each of the 40 countries that exported sugar to the United States 44 years ago. Imports above this level, known as high-tier imports, are subject to an extremely high tariff.

Most imports come from developing countries in Central America, South America, Asia, Africa and the Caribbean, and are in the form of raw cane sugar — which must be refined for use in making food products sold directly to consumers.

Why Are Sugar Prices So High?

Unlike with other commodities, the federal government — through the U.S. sugar program and trade agreements — restricts imports to keep domestic prices artificially high and mandates marketing allotments to restrict domestic production.

The One Big Beautiful Bill Act updated certain aspects of the U.S. sugar program to improve program administration and increase sugar supply. Looking ahead, government agencies also have an important role in making the program more market oriented.

In 2023, the Government Accountability Office (GAO) recommended USDA reevaluate its method for restricting sugar imports. If implemented, these recommendations would help lower costs for all stakeholders.