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August 13, 2009 12:07 PM

Food Firms Sound Alarm on Sugar Shortage

Posted by Daniel Carty
(CBS)
It could get a lot easier to reduce the amount of sugar in your diet, if some of America's biggest food companies are to be believed.

Several giant food producers sent a letter to Agriculture Secretary Tom Vilsack warning that the U.S. might "virtually run out of sugar" of the country didn't reduce import restrictions on the increasingly expensive commodity, according to a Wall Street Journal report $ Thursday.

The firms – including Kraft Foods Inc., General Mills Inc., Hershey Co. and Mars Inc. – indicated that if they couldn't tap supply markets like Brazil, they'd run out of sugar to make candy bars, cookies, cereal and a host of other products.

Currently, the U.S. only allows unlimited imports from Mexico without tariffs in an effort to boost prices for U.S. sugar farmers. Tariff-free supplies from other sugar-exporting countries are limited by a quota.

If those restrictions aren't eased, the food companies said they'd be forced to hike prices and slash jobs.

Many economists, however, aren't buying the argument and doubt the intentions of the firms.

"We doubt if they will do anything because there is absolutely no shortage of sugar in this market. Every sweetener-user company that's looking for sugar can find it. We've got sugar sellers right now who've got sugar piled up waiting to sell," Jack Roney, chief economist for the American Sugar Alliance, told CBS News.

Roney said that the projections used by the companies assumes Mexico will cut its current level of supply to the U.S. to just one-tenth of what it was last year.
Tags:
sugar ,
wall street journal ,
import ,
tariff ,
tom vilsack
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Add a Comment See all 28 Comments
by quapawsix August 17, 2009 10:47 PM EDT
Quit buying sugar or anything with sugar for a month and see if their tune changes
Reply to this comment
by ibsteve2u August 14, 2009 7:26 PM EDT
Matter of fact, all that we have to do to resume growth in America again is to roll EVERYTHING - minimum wage, wages, salaries, taxes, rental rates, house values, and consumer prices - back to where they were in 1979 before Republican tax cuts and Republican protection of oil company profits (and Republican efforts to block weaning ourselves from oil) started driving the American economy out of whack.
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by mary-miami August 14, 2009 5:33 PM EDT
Surely Mexico is not our only sugar supplier...? We can even grow sugarcane in the United States...Florida for example.
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by ibsteve2u August 14, 2009 7:21 PM EDT
If permit unlimited imports from Mexico, all that our sugar producers and refiners will have to do to compete with them is to reduce the pay of their workers to $16.27.

A day.
by xlib August 14, 2009 11:58 AM EDT
Uh OH, another CRISIS!!! Gotta love it. Yea, it is funny when the dems decided that the obese were the evil ones and causing rise in health care. No mention of tort reform in the bill, not one word.
Reply to this comment
by afmcalax August 14, 2009 8:54 AM EDT
Why should American consumers pay more for sugar and products made from sugar so a few, influential sugar beet farmers can maintain their wealthy lifestyles. Where are all you Republicans that want free markets and competition? If Latin and South American countries can grow sugar cheaper than they should be able to sell it here?

The high tariffs on imported sugar is a leftover from the World Wars when the U.S. needed to ensure a safe supply. That need has long since passed. Maybe if farmers in Latin and South America had a market for sugar in the U.S. they would not need to grow poppies.

This is another example of big business being cut a break and the American consumer picking up the price.
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by xlib August 14, 2009 12:02 PM EDT
Oh so now you call on the Republicans to fix this and I love the class warfare comment. So, just who has the majority now, and, geez, for the past 3 years. Seems like this is something that has been going on for a long, long time and I question the timing of this new CRISIS de jour. Too convenient for the thug.
by afmcalax August 14, 2009 1:27 PM EDT
Duh to xlib ... where is the class warfare comment coming from? Trying to eliminate sugar quotas has gone on for decades but the few sugar beet farmers in the Southern states call in their favors to those bought off politicans and it gets defeated every year. Bush had 8 years, Clinton 8 years before him and nothing is ever done. I am just saying that from 2000 to 2006 Republicans had the majority in Congress and the Presidency, this was the time to let this quota die and they did not.

This is anti-consumer, whether it helps the candy makers, etc. is not the issue. The issue is that if Republicans truly believe in free market capitalism then this should have been resolved years ago. That a few rich growers can make the rest of America pay more for all products that contain sugar is not right.
by ibsteve2u August 14, 2009 7:13 PM EDT
"Maybe if farmers in Latin and South America had a market for sugar in the U.S. they would not need to grow poppies."

lolll...growing poppies is illegal in all countries down there. They do coca.

Me, I see what has happened to America with "free trade"...and discounting CEO pay and the profits that some big box retailers have made, I find very little that is good for America now or good for America's long-term prospects.

We fight on an unlevel playing field...the cost of living is so much lower in most other countries that their wages and thus their cost of production is also much lower.

Those sugar producers who are offshore will most certainly drive ours out of business because of the huge differences in cost structures, eliminating both the associated farming and refining jobs.

Will we sacrifice all so that the few can get richer by exploiting the differences? (Well, exploiting for a while...as America gets poorer, consumer prices will also either fall - which they are doing even now - or the market that was America will become a memory.)
by opleez August 14, 2009 8:23 AM EDT
Let's see...maybe they can take the sugar out of things that shouldn't include it like soups, frozen dinners, processed meats and other processed foods then they'd have plenty of sugar for their over sweetened candies and baked goods. A sugar shortage would be the blessing this country needs!
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by creeper00 August 14, 2009 7:52 AM EDT
More fearmongering from those with a bit of power. Wouldn't it be nice if our politicians and big business quit trying to scare the sgut out of us every chance they get?
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by barbaram99 August 14, 2009 3:27 AM EDT
I had a can of pop and and my friend wanted it. I looked to see how much sugar was in that can of grape soda. Over half of it. I did not buy any more, I saw on the news where they say there is a shortage of sugar, Can they made the thingg that call for sugar with less if there is trully a shortage. People eat too much sugar. I can eat a bowl of corn flakes with no sugar. People over salt their food. I don't as their is salt in the food. A candy bar. They are too costly. I 'member 5 cent candy bars Growing up there was penny candy. We had it every once in a while. A sugar scare. I don't know. We use too much.
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by marfly August 13, 2009 11:31 PM EDT
sure there is a sugar shortage like there was a gas shortage and then suddenly the gas shorage disappeared - bs...............it sounds like blackmail - don't reduce the import tax then no sugar for the fat americans - why produce products that are so unhealthy? those companies don't give a darn about anyone but the bottomline....and one or more of those companies is probably the parent comPANY of CBS...
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by davlar2 August 13, 2009 3:11 PM EDT
Sounds like a case of price manipulation, not unlike when speculators caused price of gasoline to run up past $5/gal. FTC should investigate.
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by davlar2 August 13, 2009 3:10 PM EDT
Sounds like a case of price manipulation, not unlike when speculators caused price of gasoline to run up past $5/gal. FTC should investigate.
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by rightbehind August 13, 2009 3:02 PM EDT
Playing on the fears of the uneducated. Too Funny!
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by rightbehind August 13, 2009 2:59 PM EDT
Silos are filled with corn that was going to be used for ethanol. Make sugar from it. There must be speculators at work again. You can make sugar from beets. You can make sugar from sorghum. Talking about alternative foods! These guys must get a laugh out of getting the uneducated going. Better than that. Pile a bunch of republicans into town hall meetings to complain about the sugar shortage. LOL
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by pgkuchar August 13, 2009 2:28 PM EDT
I find it funny that this "alarm" should be sounded right at the point where the government is toying with the idea of taxing sugar as part of the health care bill to help fight obesity. So I suspect this may well be a lame attempt to raise this issue so it gets considered in the debate. The lobbyist can now go to Washington to say how they already are paying huge penalities in the form of tariffs as it is.
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by mswolfestock August 13, 2009 3:14 PM EDT
These greedy *B*A*S*T*A*R*D*S* are trying to manipulate the market just like the oil speculators did, and that's why the price of gasoline went through the stratosphere. We need to call out the speculators so they don't get rich off of our fear. I'll bet you my next paycheck that people will start hoarding sugar based on this story, then the price WILL go up because people panicked.
by ToolMangler1 August 13, 2009 4:01 PM EDT
by mswolfestock August 13, 2009 3:14 PM EDT
"These greedy *B*A*S*T*A*R*D*S* are trying to manipulate the market just like the oil speculators did,"



100% agreement... I was about to make the same general statement when I saw yours. It said everything I was going to.
by jtdev1 August 13, 2009 1:48 PM EDT
OMG! No Sugar...

What are we going to do??? How will we be able to create more DIEBETICS without Sugar???
Reply to this comment
by sjc_1 August 13, 2009 1:38 PM EDT
I would rather import sugar than $1 billion in oil each day. Better yet, start growing sugar cane and beets here again, use the refuse for biofuels and get rid of high high fructose corn syrup in food and beverages all together. It is time we did what we need to do and quit doing what ADM and Exxon want us to do.
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by aChangeOfIdeas August 13, 2009 3:08 PM EDT
we never stopped growing sugar cane and beets here. We just consume FAR more than we produce! How sad is that? But if we bump the cotton fields for sugar cane, what will we make our jeans and T-shirts out of?
by sjc_1 August 13, 2009 3:35 PM EDT
Most of the clothes are produced in other countries and most of the fabric is made in other countries. We have more than 100 million acres planted in corn. The stalks and cobs from all of that can produce 10% of the fuel for our cars in a matter of years, but first we need to get out of the grip of ADM and Exxon.
by aChangeOfIdeas August 14, 2009 8:11 AM EDT
Well I was just using that as an example, but actually the US is the 3rd leading producer of cotton, and we actually EXPORT between 40-50% of the cotton. Yes, some of that ends up coming back to us in the form of clothes made in other countries. I'm not sure how well sugar cane (a southern crop, like cotton) will grow in most of the 'corn belt', say, in Iowa. There, sugar beets might do better.
by sjc_1 August 14, 2009 12:33 PM EDT
ADM was behind the corn syrup mess. They have to chemically alter the product to make it high fructose, but it sells what ADM offers so they get behind a sugar tariff. ADM also got behind using corn for ethanol and not cane nor beets, because that is what they produced. They still grow cane in Florida, Louisiana and Hawaii, but not that much because ADM has crowded out the market with their chemically altered corn syrup.
by credibility2 August 13, 2009 1:20 PM EDT
Sound the alarm already! Nice timing now that school is resuming for the population where obesity is on the rise. Sugar, you mean more like high fructose corn syrup, which is worse than granulated sugar. I guess folks will just have to rely on fruits to get their sweet fix. And, bye-bye to the sugar laden sport's drinks. This is also a great excuse to raise the prices and reduce the size of the sugar bag; what used to be five pounds was reduced to four pounds without the price going down. What's next? A three pound bag at the price of a five pound equivalent?
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by stn_sage August 17, 2009 5:04 PM EDT
WHAT?! This is ridiculous! This makes one wonder, JUST HOW STUPID these company CEOs think mainstreet Americans really ARE?!

A sugar shortage? B*S* (fill in the asterisks)!

Sugar is a bulk crop! There shouldn't be any trouble getting their hands on it! Unless---the industry group has some 'arrangement' to create an artificial shortage to drive up prices, that is!

You don't RAISE YOUR PRICES now---in the HOPE that a producer nation is going to restrict supply at some unknown time in the future---perhaps, far into the future---allowing, if not requiring, these companies to increase their price to the consumer!
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