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.