The U.S. Senate narrowly defeated a proposal Wednesday that would have ended the sugar price protections considered crucial to the Billings and northern Wyoming region’s $72 million sugar economy.

The proposal to amend sugar protections out of the 2013 farm bill failed 45-54 as lawmakers from sugar-producing states locked horns with peers from regions with candy and food manufacturing.

“Let me be very clear — I find this amendment to be a personal affront to the hard-working, economic-driving, sugar beet farmers in Montana,” said Sen. Max Baucus, D-Mont.

At issue were federal price supports most commonly called the “sugar program,” which with some exceptions, limits the flow of foreign sugar into the country, provided U.S. farmers produce enough beet and cane sugar to meet demand. With rare exception, the program doesn’t spend tax dollars.

The sugar program offers economic stability to communities such as Billings, where Western Sugar Cooperative employs 92 full-time and 121 seasonal workers at its refinery. Revenue from locally raised beet sugar totals $72.3 million annually, according Western.

Additionally, the cooperative employs 48 full-time and 68 seasonal workers at its refinery in Lovell, where annual revenue totals $49.3 million. As a regional trade center, Billings receives much of that Lovell revenue.

The nation’s candy lobby opposes the sugar program, arguing that foreign sugar flowing freely into the United States would make for cheaper treats and boost manufacturing jobs in candy and food industries.

Without cheap foreign sugar, candy jobs will leave the country, said Sen. Jeanne Shaheen, D-N.H., who sponsored the amendment along with 18 co-sponsors to scuttle the sugar program.

“Since 2008, sugar prices in the United States have soared to record highs and they’ve consistently reached levels that are about twice the world price for sugar,” Shaheen said on the Senate floor. “In fact, the sugar program has cost consumers and businesses as much as $14 billion over the last four years.”

Sugar proponents countered that sugar prices are currently in a 30-month slump. Sugar accounts for about 3 cents of a $1 candy bar’s cost. As sugar prices have fallen 52 percent since 2010, candy and food prices for sugar ingredient foods from bread to breakfast cereal increased.

“I would rather not have something so important to our food supply be mostly imported,” said Don Steinbeisser Jr., a Sidney, Mont., farmer who raises beets for American Crystal Sugar, which has a refinery in Sidney. “I don’t want to eating Venezuelan or Brazilian sugar. I’m sorry. I want my sugar grown in America.”

Sugar prices did reach high levels a few years ago as weather harmed sugar production in India and Brazil and more sugarcane went into ethanol production. Those events tightened world market supplies and increased sugar prices. In the U.S. limits on imported sugar pushed the price upward, as well.

But since then, sugar production has significantly increased in the U.S. and worldwide. Prices have fallen as a result.

Wholesale sugar prices have fallen 562 percent since peaking in 2010. The federal government is now considering applying a never-before-used Feedstock Flexibility Program to buy sugar and stabilize the prices.

Shaheen’s amendment would have eliminated the Feedstock Flexibility Program created in 2008 as a safeguard against sugar imported from Mexico, which under the North American Free Trade Agreement flows freely into the U.S.

Mexico had a bumper crop sugar year, Steinbeisser said, as did North American sugar beet and sugarcane farmers. Rarely do all three sugar sources have big production years, but when they do supplies surge and prices fall.

(1) comment


What is so surprising? Study supply and demand 101. It's a free market reality.

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