FOR IMMEDIATE RELEASE                                                   CONTACT:   Phillip Hayes
Monday, February 23, 2009                                                     202-507-8303

WASHINGTON—Be careful what you wish for.  That was the warning to food manufacturers in a new study released today by the American Sugar Alliance about the importance of domestic sugar producers.  

Volatile prices, substandard quality, and delivery issues would result if the domestic food industry had to depend on foreign sugar, the study, authored by McKeany-Flavell Company, concluded.

Large candy companies have long lobbied Congress and Administration officials to harm American sugar producers through policies that would favor foreign competitors, which are often able to sell sugar at cheaper prices because of subsidies and looser environmental and labor standards.

Economic pressures on sugar producers, caused in part by unneeded imports, have taken a toll in recent years.  Since 1996, 35 U.S. sugar mills and refineries have closed.  If the trend continues and America's sugar producers are pushed out of the market completely, there will be dire consequences for U.S. candy, cookie, cake, and cereal makers, the McKeany-Flavell paper explained.

"Our recommendation: be careful.  Significantly greater United States dependence on imported sugar may not guarantee lower sugar pricing over the long term," read the report.  To make its case, the report cited events of the 1970s, when America had no sugar policy and depended on the world sugar market.  

"Sugar prices spiked twice within that decade," according to McKeany-Flavell, a commodities research firm from Oakland, Calf.  In 1974 and 1979, raw sugar prices hit 65 cents and 40 cents per pound, respectively.  That's compared to today's U.S. raw price of 20 cents.

In addition to pricing concerns, the study examined other headaches that food manufacturers would face without America's sugar industry.  Among them: consistency of supply; consistency of quality; the form in which sugar is delivered; and "just-in-time delivery," a term used to describe the domestic sugar delivery chain where sugar producers are responsible for storage, handling, and transportation under precise delivery schedules.

"[W]e must recognize the value U.S. sugar producers offer to consumers," wrote McKeany-Flavell.  "Providing consistent quality and supply, in the requested packaged form, and through just-in-time deliveries...is a very complex and difficult process that cannot be recreated overnight, if at all, through a 100-percent sugar import program."

Sugarbeet farmers from across the country are descending on Capitol Hill this week and plan to discuss the study with legislators and USDA staff.  They will explain that if current sugar policy is weakened or if more of the U.S. market is ceded to foreign producers, then McKeany-Flavell's predictions could become reality.