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St. Gabriel, La. » From soft drinks and chocolate bars to breakfast cereal and ice cream, America consumes more than 10 million tons of sugar each year.
No wonder the country is running low on this sweet commodity.
The amount of sugar that the United States has in reserve is expected to drop 43 percent from Sept. 2009 and Sept. 2010. Large U.S. food companies have warned that a "sugar shortage" is inevitable, unless the U.S. Department of Agriculture allows for more imports.
But sugar industry experts say flooding the market with cheap foreign-grown sugar would only hurt U.S. farmers, who are enjoying some of the best prices in decades.
While the U.S. produces about 8 million tons of sugar each year through sugar cane and sugar beet crops, that's only about 75 percent of what the country consumes. The remaining 25 percent is imported from dozens of different sugar-producing countries. (Under NAFTA, an unlimited amount can be shipped from Mexico.)
There are numerous reasons for the depletion of the national sugar reserve, Charley Richard, a sugar researcher and consultant, told members of the Association of Food Journalists last week. The national group toured the sugar cane fields at Louisiana State University Sugar Research Station in St. Gabriel, just outside of Baton Rouge, as part of its annual conference.
The first is consumption. The world consumes more sugar than farmers
According to USDA statistics, the U.S. inventory of sugar at the end of 2008 was about 1.5 million metric tons. By the end of 2010 it's projected to be around 500,000 metric cons. "But we don't need to ration," said Richard, who is the publisher of the Sugar Journal, a trade magazine.
The prices have damaged the bottom line for both large and small companies who use sugar in their products
Marilyn Oakley, general manager and co-owner of Salt Lake City's C. Kay Cummings Candies, said last year she paid $20 for a 50-pound bag of sugar. This year she is paying $23. She'll go through more than 100 of those bags in a year.
Oakley also has been warned by her suppliers that prices on chocolate also will increase before the holidays, possibly due to the high cost of sugar. "It's a problem," she said. "When the cost of ingredients goes up, I don't feel like I can pass those costs along without risking customers."
The big brands aren't afraid to make consumers pay. In August, the leaders of Kraft Foods, General Mills Inc., Hershey's Co., and other major food companies wrote a joint letter to the Department of Agriculture warning that they would have to raise prices and possibly lay off workers if federal importing rules were not changed.
Specifically, these large companies want the quotas -- which set limits on how much sugar can be imported each year -- to be relaxed. Food companies already import about 1.4 million tons of sugar, according to the USDA.
In August, shortly after the companies demanded the federal changes, Jim Miller, the agriculture undersecretary, was at a sugar-industry gathering in Utah. At that time, he said an increase would be possible, but unpopular with sugar farmers, who lose $160 million for each one-cent drop in sugar prices.
Growing and processing sugar beets was a major industry in Utah for more than a century.
The state's first factory was built in 1891 by the Utah Sugar Co., the first beet sugar factory in the United States built with American machinery. The factory was a success and created immediate excitement about growing and processing sugar beets. By 1897, Utah had 17 factories.
Through the years, small factories combined to make larger businesses, the most well known being Amalgamated Sugar Co. and the Utah-Idaho Sugar Co. The industry faced booms and near-busts including surviving the Great Depression and an invasion of the beet leafhopper, known as the white fly.
In the 1980s, the Utah-Idaho Sugar Co. abandoned production and the Amalgamated Sugar Co. closed its headquarters in Ogden, ending Utah's sugar beet industry. Amalgamated still has factories in Idaho and Oregon and remains one of the largest beet sugar producers in the country.
Source » Utah historian Leonard J. Arrington and the Utah History Encyclopedia.
