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High Sugar Prices Hurt American Economy, SUA Study Shows

May 07, 2007

High Sugar Prices Hurt American Economy, SUA Study Shows

The Sweetener Users Association (SUA), of which IDFA is a member, released a white paper last week that examines several misconceptions about the price of sugar in the United States. The paper explains that current artificially high prices have a negative impact on the American economy and demonstrates the need to reform the current federal sugar price support program.

The dairy industry is greatly affected by U.S. sugar policy. In 2006, the dairy industry used approximately 1.1 billion pounds of sugar, representing 12% of the total amount of cane and beet sugar used for industrial food processing in the United States.

"Sugar is a major manufacturing cost for our members who make ice cream and flavored milk, and we agree that we need to work toward a sugar program that will be more market oriented," said Clay Hough, IDFA senior vice president. "The extreme volatility in the sugar market is a direct result of a federal sugar program that isn't working and needs to be fixed."

According to the study, the current sugar program includes government price supports that protect domestic producers from more efficient foreign competitors, and prohibitively high U.S. import tariffs. These steps raise the price of sugar by five to 10 cents per pound and keep them higher than most other countries.

The high prices are hurting the American economy, the study says, because they drive American jobs overseas. Manufacturers with plants in other countries can buy sugar at a much lower world price and then export the sugar-containing products to the United States.

IDFA continues to work with SUA and congressional leaders to develop a constructive and forward-looking sugar policy for the 2007 Farm Bill.

To read the white paper, "The True Story about U.S. Sugar Prices," click here.

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Posted May 7, 2007

Dairy Delivers