One year ago this month, the country’s biggest food manufacturers caused a near panic when they sent the USDA Secretary a letter claiming that the United States would “virtually run out of sugar” if the Department didn’t immediately import more sugar.

The Wall Street Journal put the news on its front page with a headline that exclaimed “Food Firms Warn of Sugar Shortage.”  And then the snowball began.

National television news programs, radio stations from coast to coast, and magazines and newspapers of all sizes picked up the story, which even made its way onto a popular comedy “news” show.

U.S. sugar producers responded by pointing to USDA estimates of surpluses for the 2009 crop year, not shortages, and blamed food manufacturers for causing an unneeded panic with shoppers to score political points in hopes of crippling U.S. sugar policy.

The Los Angeles Times examined the facts and quickly printed a balanced story that quoted an analyst who said the warning by the food companies was more about the politics of sugar quotas than price spikes or shortages.

Other newspapers followed suit.  Even the Examiner, which has been critical of U.S. sugar policy in the past, admitted, “We can stop worrying about the possibility of a sugar shortage…After factoring in inflation, the price of sugar has actually fallen over the last 30 years.”

Too late; the damage was done.  Phones at the American Sugar Alliance were lighting up with calls from concerned citizens.

So one year later, who was right?

The USDA didn’t cave to food manufacturers’ demands for immediate import increases and instead opted against further imports for the crop year, which concluded on Sept. 30, 2009 with approximately 1.2 million tons of surplus sugar left over.

For perspective, that’s enough sugar to give every man, woman, and child in the U.S., Mexico, and Canada a five-pound bag of sugar and still have 11 million bags sitting around.

As these stocks were drawn down during the year, the USDA used its authority under the Farm Bill to up imports by 500,000 tons during 2010 to ensure that supplies wouldn’t be tight and everyone would have plenty of sugar to buy.

The smoothness of the policy—which aides the USDA in making import decisions based on fact instead of speculation—earned it high marks from key lawmakers for giving the USDA the flexibility it needed to help maintain a balanced domestic market at a time when other countries faced real emergencies.

In fact, the policy worked so well that a recent Harris Interactive poll showed that only 1% of Americans thought sugar availability was an issue at their local grocery store.

And that figure is unlikely to rise anytime soon.  USDA estimates that the current crop year will again end with more than 1.2 million tons of surplus stocks.

Seems like a far cry from a sugar shortage.  Maybe somebody’s lobbyists were just crying wolf last year—something lawmakers are unlikely to forget as they prepare to debate sugar policy in the 2012 Farm Bill.