The Inconvenient Truth for U.S. Sugar Producers Well, here they go again. The U.S. sugar industry's trade association, the American Sugar Alliance, is moaning about the decline in sugar acreage planted in this country, claiming that Americans are cutting back because Mexican sugar is flooding the U.S. market. But, as usual, the facts don't support their claims. The truth is that the decline in U.S. sugar acreage PREDATES the accusations by the U.S. producers of a "flooding" of the U.S. market. Indeed, it predates the enactment of NAFTA for sweeteners. Because Big Sugar won an exemption, NAFTA did not go into effect for sugar and corn syrup until 2008, and the U.S. had only minimal competition from Mexico. But in the pre-‐NAFTA days, from 2002 and 2007, according to the U.S. Department of Agriculture, sugar beet cultivation in the U.S. fell from 1,366,000 to 1,254,000 acres, and sugar cane from 978,000 to 847,000 acres. Overall, that is a decline of more than 10 percent in just five years. Now, take a look at the chart below: 1,600.0 1,400.0 Beet Yield 30.0 1,200.0 25.0 1,000.0 20.0 800.0 15.0 600.0 10.0 400.0 Area Planted 35.0 Trends in US Beet Acreage and Yields 2001-‐2015 2013/14 2012/13 2011/12 2010/11 2009/10 2008/09 2007/08 2006/07 2005/06 2004/05 2003/04 2002/03 2001/02 Yield Sugar beet acreage bottomed out in 2008-‐09 and has actually risen 11 percent since then. [See table 14 at this link] Meanwhile, farmers are getting higher productivity -‐ or yield per acre -‐ so they are using lower inputs (fewer acres), which is just what you would expect as agriculture gets more efficient. Despite the slur in the snide commend from Big Sugar about “efficient” U.S. producers and “inefficient” Mexican producers, the truth is that sugar production in both countries is getting more efficient, but Mexican producers, overall, are MORE efficient – which is, after all, at the root of U.S. complaints. Talk of acreage is really a smoke screen. Mexican exports are trending downwards and U.S. prices are trending upwards. What the U.S. producers really want is no competition at all. They want to maintain their near-‐monopoly. That’s the true outrage. The U.S. sugar monopoly is costing Americans, who must pay prices well above the global average for their sugar, and absorb the direct costs of subsidies like those non-‐recourse loans, billions of dollars a year.
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