bake - January 2012 - 18

legislation

A Sweet Battle

Reforming federal sugar subsidies can save American consumers up to $3.5 billion and generate 20,000 new jobs each year, according to a new study by Iowa State University researchers. The study shows that in the absence of current sugar policies, food industry jobs would increase as production and exports of sugar-containing products grow, and as imports of such products from other countries decline. “This study clearly shows the impact of the high costs of the current sugar policy, but also tells us about the potential for consumers, small businesses and workers to beneﬁt from a better policy,” says Larry Graham, president of the National Confectioners Association and chairman of the Coalition for Sugar Reform. “The report should caution Congress against any lastminute attempts to extend the current sugar program without the opportunity to debate changes.” Sugar reform is expected to be a major part of ongoing negotiations to carve out a 2012 Farm Bill in the year ahead. Many are expecting a tough fight among legislators and lobbyists debating the extent of cutbacks to federally subsidized programs in current farm policy. The Coalition for Sugar Reform (www.SugarReform.org) represents consumer, trade and commerce groups; manufacturing associations; and food and beverage companies that use sugar, including confectioners, bakers, cereal manufacturers, beverage makers and dairy companies.

U.S. sugar prices held at historically high levels in 2011, according to Milling & Baking News, a Sosland publication. A clearer picture began to emerge in sweetener markets in late 2011 when the U.S. corn and sugar beet harvests were mostly completed, and the sugar cane harvest was well under way in the United States and gaining momentum in Mexico. There appeared to be a softer tone to the sugar market, with prices easing domestically and globally, but corn sweetener values for 2012 were coming in above 2011 levels. At the same time, the sugar cane harvest was progressing well in the South and was under way in Mexico, which has become the source of more than 10% of the U.S. sugar supply. The latest U.S. Department of Agriculture projection of 2011-12 imports of Mexican sugar was pegged at 1,581,000 short tons, raw value, which was up 37% from October. Several years into the North American Free Trade Agreement, which provides for the free ﬂow of sugar and corn syrup between the United States and Mexico, the U.S. has seen more periods of tight sugar supply and higher prices despite the dramatic increase in sugar from Mexico. NAFTA seemingly has resulted in higher sugar prices and tighter supplies in Mexico and signiﬁcantly increased shipments of U.S. 55% high-fructose corn syrup to Mexico, where sugar consumption has declined about 20% since 2007 while HFCS consumption has soared about 2.3 times.

18 < JAN 2012 | bakemag.com

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bake - January 2012

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