Sugar cane

An economist with a sugar group said stable prices, stable demand and an agreement with Mexico has the industry in a sweet spot.

“I’ve got to tell you, of my 30 years in the industry this is the most optimistic I have ever been,” said Jack Roney, director of economics and policy analysis for the American Sugar Alliance, a national coalition of sugar cane and sugar beet growers, processors and refiners. Roney was in Baton Rouge Tuesday for the American Sugar Cane League’s annual meeting. About 400 people are attending the meeting, which wraps up Wednesday at L’Auberge Baton Rouge.

Roney said prices for unrefined sugar are currently around 26 cents per pound. That’s ahead of the 21 cents per pound baseline, the amount that farmers need to get to make it financially worthwhile to grow sugar cane.

The market for sugar is steady, thanks to the Farm Bill passed by Congress in 2018. “That was a really excellent bill in terms of what we need to maintain a stable market,” he said. Farmers will operate under the bill for the next four years.

A suspension agreement has been reached with the Mexican government to prevent that country from dumping cheap sugar on the U.S. market when it has an oversupply, like it did in 2013. The agreement sets a higher floor for refined sugar prices, putting the minimum at about 33 cents per pound.

“We will only take sugar from Mexico that we need,” Roney said.

That may come in handy during 2020. Mike Deliberto, an LSU AgCenter economist, said production from sugar cane has dropped by 10% and beet sugar production is down 11%. A mild winter is setting up the next sugar cane crop for diseases, AgCenter officials warned last week.

There are some threats to sugar consumption. The regular turnover in Congress means that passing a Farm Bill will be more difficult in four years. And the Mexican agreement will need to be renewed, Roney said.

After years and years of 1% to 2% growth in per capita sugar consumption, Roney said the demand is slowing down because of health conscious consumers.

While there’s a genuine epidemic in childhood and adult obesity, sugar is unfairly being blamed, Roney said. Years ago, the average American consumed about 2,000 calories a day. Now, they’re eating and drinking about 2,400 calories a day. But at the same time, the caloric consumption of sweetners has dropped 18% since 1999.

“We need to look at the overall amount of food people are eating,” he said.

Email Timothy Boone at tboone@theadvocate.com.