Will the Future of Texas Sugar be Sweet or Sour?

by: Steve Bearden

The Riverwalk in San Antonio was hopping in mid January.  That’s nothing new, but the influx of farmers from across the country added a very unique flare to the city’s nightlife.

Thousands of farmers and their families were in town for the American Farm Bureau Federation’s 90th annual conference.  And while they were here many of them took a field trip to see something they’d never seen before: Sugarcane.

Those of us at Rio Grande Valley Sugar Growers, Inc. were excited to host our agricultural colleagues from California, Pennsylvania, and nearly every state in between.   But the smiles we showed our guests during the tour turned to frowns when they left.

That’s because unlike our brethren in corn, wheat, and other commodities, sugar producers didn’t see price spikes in 2008 to help offset record fuel and fertilizer costs.  In fact, the raw sugar prices Texas cane growers depend on have been in a slump and falling fast.

And things got worse at the beginning of the month when the U.S. Department of Agriculture (USDA) increased sugar surplus projections for the U.S. market.

Government officials have upped sugar supply estimates by 567,000 tons since September, sending our surplus ratio surging to 10 percent from just 4.6 percent a few months earlier.

What does this mean?  For Texas cane farmers it means even lower prices—13 percent lower since summer to be exact—and even heavier financial losses.

Prices haven’t been the only thing souring moods around here lately.  Bad weather, skyrocketing input costs, and a potential flood of unneeded Mexican sugar entering our market as a result of NAFTA have also dampened spirits.

But there is a break in the storm clouds and some optimism for the future.

Congress recently passed the strongest Farm Bill that sugar producers have seen in some time—a Farm Bill that addresses unneeded Mexican sugar, keeps the USDA from making premature import decisions in the future, and provides sugar producers a small loan rate increase to help combat the higher cost of doing business.

The new Obama Administration has also shown a real willingness to work with sugar producers to make sure we can continue producing an ingredient found in just about everything Americans eat.

During his confirmation process, new Agriculture Secretary Tom Vilsack pledged to work with Congress “to establish policies that support sugar producers.”  President Barack Obama made similar promises during his campaign, telling sugar growers in a letter, “I believe we should reward your hard work with policies that will keep your industry and your communities strong.”

Let’s hope these promises come to fruition.  Government officials literally hold the future of the sugar industry in their hands.

On one hand, strong sugar and trade policies can ensure Americans will be eating Texas-grown sugar for years to come.

On the other hand, a weakened sugar policy and needless trade concessions could mean Farm Bureau members won’t have anywhere to see sugarcane next time they visit our great state.

Editor’s Note: Steve Bearden is president/CEO of Rio Grande Valley Sugar Growers, Inc.