LAFAYETTE — The price Thomas Viator and his family got for their 2013 sugar cane crop was so low they decided to devote more of their acreage this year to another crop.
“It forced our farm to start growing soybeans, to double crop,” said Viator, a veteran farmer from Youngsville whose farm in mid-April planted more beans than ever before.
“A lot of farmers have done it,” said Viator, who with his four brothers farms 5,500 acres in Lafayette, Iberia, St. Martin and Vermilion parishes.
On Thursday, Viator’s cane-hauling trucks will start transporting cane to mills — “sugar houses,” he says — but this year the trucks will make fewer trips.
Viator and his brothers made the decision to plant more beans this year and invest in new soybean equipment after seeing sugar prices fall to about 20 cents per pound.
The price fall triggered the U.S. government to this year step in and start purchasing sugar to keep the price at 20 cents, which cost U.S. taxpayers $278 million, according to figures provided by the American Sugar Cane League.
Farmers and sugar grower organizations blamed unchecked imports from Mexico for causing the price of U.S. sugar to fall to 20 cents from the 2010, 2011 and 2012 levels of 27 to 34 cents per pound.
American Sugar Cane League executive Jim Simon said Mexican farmers subsidized by their government “dumped” millions of tons into the U.S. market and the abundance of sugar caused prices to flatline.
“We’re fortunate we had a couple of good years,” said Simon, general manager for the Thibodaux-based organization.
The 2010-12 prices allowed some farmers to stash away for low-price times. Other Louisiana farmers were unable to keep going and got out of the business, Simon said.
Simon’s organization and others lobbied the U.S. government, which led to an announcement in August of an import duty deposit on Mexico sugar, to be imposed next year.
Simon said the announcement alone increased the price of raw sugar to 22 cents at the time.
“The market has already built in and seen some of the effects of our trade case,” Simon said. “What we’re hoping is that this will stem the flow of uncontrolled Mexican sugar into the market and allow the U.S. Department of Agriculture to manage the domestic sugar market.”
Last week, sugar had risen to the 22- to 25-cent-a-pound range, said Mike Salassi, an LSU AgCenter economist who specializes in sugar.
While that price is good, Salassi said, farmers and mills need that price to be sustained over 12 to 15 months, the period over which one year’s harvest is sold.
For farmers, the price of sugar is only one worry. There’s also the weather. Winter freezes and prolonged rain hinder cane growth and stall planting and harvest efforts.
Viator said 2014’s especially cold start hurt cane farmers in the southeast and northern cane-growing regions of Louisiana.
Farmers in Terrebonne and Lafourche parishes suffered from freezes in January and February, and cane farmers in Avoyelles and south Rapides parishes were hit even worse. But in the south-central swath of Louisiana where he farms, cane producers fared better, Viator said.
Ben Legendre, head of the LSU AgCenter’s Audubon Sugar Institute, said mills have estimated 12.5 million tons of cane will be harvested in Louisiana this year. That compares to 14 million tons in 2013. Legendre said farmers scaled back their efforts because of low prices and cold weather.
“They either plowed (the acreage) out, planted soybeans or something else,” Legendre said.
Delayed planting and stilted crop maturity also led Louisiana’s 11 sugar mills to open later this year. Though all the mills are usually open and grinding cane by this time, this past Thursday a mill in Pointe Coupee Parish near New Roads and one in the Iberville Parish town of White Castle were the first to begin operations. The remaining nine will open from now to mid-October, Legendre said.
This year’s crop will be respectable, though not as bountiful as 2013, when production almost eclipsed the banner 2012 year.
Legendre said farmers should expect up to 33 tons of sugar cane per acre, compared to 2013’s 32 to 36 tons an acre.
The 2014 crop’s sugar content — how much actual raw sugar is squeezed from each stalk — is anyone’s guess. In 2013, each acre of cane produced 221 pounds of sugar; in 2012, it was 230 pounds.
“If the season develops and we have dry weather in October and November, we could conceivably see some sugar levels approach last year’s crop,” Legendre said.
The American Sugar Cane League’s Simon bristles when asked about the U.S. government propping up sugar prices with taxpayer money, then quickly releases justifications.
He’s heard it before from the laissez-faire crowd, who argue government intervening in free markets is destructive and hurts the economy in the long run.
“The basis of our argument is we’re ready to compete against every foreign sugar cane farmer or sugar beet grower in the world,” Simon said. “But we can’t compete with that grower and their government.”
In August, the U.S. Department of Commerce announced it would impose an import duty on sugar from Mexico until it completes an investigation into Mexican government subsidies to its farmers and mills.
“The (Department of Commerce’s) finding validates our claim that the flood of Mexican sugar, which is harming America’s sugar producers and workers, is subsidized by the Mexican government,” American Sugar Alliance spokesman Phillip Hayes said in August. Hayes said the Commerce Department would issue a more detailed ruling sometime this fall.
Simon said American sugar producers need the price supports their government provides just to break even, at best. He said sugar growers want fair competition, which is not possible now.
“We would have to unilaterally disarm to do that. ... It would run us out of business,” Simon said.