The big news out of the Everglades today is that the State of Florida has purchased U.S. Sugar and its 187,000 acres of prime wetlands for $1.7 billion (are the workers seeing any of it? Of course not). This is a good thing for the environment, since the sugar cane fields block waterflow, release pollutants and generally take up space.
U.S. Sugar is the largest sugar producer in the United States, responsible for 9% of the nation’s sweet white powder supply. That’s a pretty big proportion, and includes beet sugar production as well. Beet sugar makes up 55% of the crop, leaving cane sugar with 45%. So 20% of our cane sugar’s about to go away! Isn’t this going to foul up prices?
Short answer: no.
The government has been subsidizing domestic sugar production and putting quotas on sugar imports for many decades now. If we had no tariffs on sugar, we’d be flooded with South and Central American product, prices would plummet and sugar growers around the country would go bankrupt. A very strong lobby has prevented this from happening, but at the beginning of this year, NAFTA kicked in and ended tariffs against Mexican sugar. So why hasn’t the U.S. sugar industry collapsed in a sticky white heap?
The answer lies in the 2008 Farm Bill. The provision concerning sugar sends any excesses (which is to say, any amount of sugar that would cause a price decrease through oversupply) to ethanol plants, just like in Brazil.
Problem solved! What NAFTA giveth (to consumers), the Farm Bill taketh away. When 9% of our sugar production goes offline in six years, the difference will simply be made up by Mexican sugar producers, and the price won’t budge a cent. The cost of gasoline may go up a little, but what else is new. Did you really think Charlie Crist would have bought the farm if it meant a nationwide rise in sugar prices? That’s so sweet.
Florida to Buy Sugar Maker in Bid to Restore Everglades [NYTimes]
U.S. Sugar [Official Site]
Sugar and Sweeteners: Policy [NYTimes]
Cane and beet share the same chemistry but act differently in the kitchen [TIME]
Cane and beet share the same chemistry but act differently in the kitchen [SFChron]
Sugar and Sweeteners: Policy [USDA]
Farm bill improves sugar program [AG Weekly]
Human cost of Brazil’s biofuels boom [LATimes]
[Photo: a sugar pyramid scheme, via VsTrash/flickr]