Sugar growers face many problems

INDIAN WELLS, Calif. — Sugar beet growers face a range of problems, industry officials said here at the American Sugarbeet Growers Association meeting this week.

While all commodity producers are facing economic problems, the sugar growers face a special set of circumstances, said Rob Johansson, director of economic and policy analysis for the American Sugar Alliance, a coalition of beet and cane growers.

In the face of concerns about obesity and the rise of GLP-1 drugs, global consumption of sugar is down while the supply is up, he said.

As the world population grows, consumption should rise but “that is not happening now,” he said.

While the fall in oil prices is generally good for agriculture, Johansson said, that is leading Brazil and India to turn away from using sugar for ethanol production and toward exporting more sugar.

“The world market is very bearish,” Johansson said.

Around the world, Johansson said, the cost of production exceeds current prices, which means that countries “have to provide a fair amount of assistance,” he said.

Waivers of Supplemental Nutrition Assistance Program rules to allow the states to stop SNAP participants from buying sodas and candy with their benefits may further reduce consumption, he said.

U.S. sugar growers do not produce enough sugar to supply the entire U.S. market, but the above-normal stocks in the United States should mean lower imports, particularly Tier II sugar on which the users pay tariffs, but the imports are continuing because the prices of the imported sugar are lower, he said.

The sugar market is complicated, he said, with demand for liquid sugar becoming more important in the beverage market.

Craig Ruffolo, owner and vice president of McKeany-Flavell Co. Inc., a Lafayette, Calif.-based consulting firm, explained that the sugar markets are somewhat divided. Cane sugar dominates the retail market because the population of the United States is concentrated on the coasts, he said. The ASR Group owned by the Fanjul family has the No. 1 and No. 2 retail brands, but United Sugars, which represents mostly co-ops in the Midwest, is a competitor in the Southeast. Beet sugar produced in the Midwest is used by the many food companies around Chicago and other Midwestern cities.

Freight costs are a factor in imported sugar, particularly sugar that comes in under the Tier II program, Ruffolo said.

Forfeitures to the government would eliminate the oversupply but create problems in the long run, he said.

Growers will probably have to get through another “challenging” year, Ruffolo said, but there is hope of “tightness” in 2027, he said.

Luther Markwart, CEO and executive vice president at the American Sugarbeet Growers Association for the past 44 years, told The Hagstrom Report that the growers still have not heard from the Trump administration about how the Agriculture Department will administer the $1 billion in farm aid set aside for the sugar and specialty crop industries in the Farm Bridge Assistance Program.

Markwart said the situation for beet sugar growers is so dire that attendance at the meeting was down 20% because some growers could not afford to attend.

But Neil Rockstad, president of the American Sugarbeet Growers Association, told the Red River Farm Network, “It certainly is tough times, but I don’t see anybody in this crowd or across agriculture who’s giving up. The market conditions changed drastically in 24 months. Certainly not the way I would like to leave it, but the pieces are in place, the people are in the right places, and we’re having the right meetings to make sure there’s a bright future.”