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Shortage of sugar could see imports from Mexico

Shortage of sugar could see imports from Mexico

The sugar market could be facing a shortage next year, as an early freeze and wetter conditions than usual have ruined some of this year’s crop. 

On Friday, Nov. 15, the U.S. Department of Agriculture announced that it fully intends to take appropriate actions to ensure an adequate supply of sugar to the U.S. market.

“We’ve had a horrible harvest,” said Luther Markwart, executive vice president of the American Sugarbeet Growers Association. “We’re going to leave over 140,000 acres of sugar beets in the ground, which to put it into perspective is a field about a mile wide from Denver to Scottsbluff.”

In Scottsbluff, Kendall Busch, president of the Nebraska Sugarbeet Growers Association said, the Western Sugar Factory is still harvesting sugar beets and processing. Still, many of the other sugar factories, such as American Crystal Sugar and Minn-Dak Farmer’s Cooperative, are done with harvest. 

In the U.S., 85 percent of the sugar supply is homegrown in sugar beets and sugar cane, the other 15 percent comes from imports. 

“Mexico will get the first chance to fill any shortages,” Busch said. 

If Mexico can’t fill the shortage, then the USDA will go to the world market.

Markwart is quick to add, though, that the U.S. has plenty of sugar since last year there was an oversupply of sugar stock.

“So, there is plenty of sugar on hand since September, and we are now harvesting our beet and cane crop. We are making it, delivering a little bit to customers and storing it,” he said. 

A short crop will mean in July or August, the sugar market will become tight, and the U.S. will probably need some sugar imported.

“(The USDA) needs to make sure they bring the right amount, and not to oversupply the market. Our growers are hurting with a damaged crop year, and the last thing they need is an oversupplied market and a depressed price,” Markwart said. 

Both Busch and Markwart agree the USDA needs to look at the numbers and balance them correctly.

In a Nov. 15, release the USDA noted it will make a decision this month but could take up to Dec. 10.

Busch says, it’s good the department is being cautious as some sugar has yet to come in

In November, the WASDE Report said the U.S. sugar production projection declined by 572,000 short tons raw value from the previous month. USDA will be addressing options soon to stabilize U.S. sugar supplies for the domestic market, avoid forfeitures and prevent or correct market disruptions.

 

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