The message to legislators will be very simple and clear. What our customers want is a reliable supply of high-quality sugar that meets their unique specifications, stored at our cost in the producer’s warehouse facilities, delivered when and where they want it — and at the lowest possible price. In order to meet those needs, they need a geographically dispersed industry, multiple supply sources and multiple competitors who battle in the marketplace over the opportunity to take care of the user’s needs.
But the industrial sugar users want the low prices they had before this farm bill. All they have to do is look back at history to see that from 1985 through today, low prices have caused the closure of 53 beet and cane factories, mills and refineries. Only 48 beet and cane processing facilities remain. Along with consolidation, the industry has transitioned to be the last owners of the factories. Because of high risk and low returns, it has driven third-party factory owners out of our business, forcing growers to buy the companies — not out of want, but out of necessity. Further industry consolidation is not in the industrial or end-consumer’s interest. It is a threat to the food security of our nation.
Sugar users will argue that the current policy is an outdated system of command and control government, and they will raise all of the old tired arguments we have heard for years. The fact of the matter is that we have the best story to tell in agriculture:
• We have run a no-cost sugar policy for the past 11 years, and it is scheduled to be no-cost for the next 10 years.
• 142,000 jobs are related to our industry.
• We pump almost $20 billion into the economy.
• Our policy is a proper response to the unfair foreign trade practices of dumping surplus sugar on the world market at prices below anyone’s cost of production.
• The beet sugar industry is one of the lowest-cost sugar producers in the world; yet we can’t survive against unfair foreign trade practices. If all federal policies were as fiscally responsible and effective as U.S. sugar policy, we would have huge budget surpluses instead of staggering deficits and debt.
• Our policy works, and it should be left alone.
The path of the 2012 farm bill is still very uncertain. With major structural changes coming in the policies of other crops, uncertainty of the funding for those policies, alignment with the agriculture community, politics/elections and the lack of time to consider a farm bill this year, a one-year extension of current policy is certainly in the mix.
The next critical policy decision by the Obama Administration is whether additional imports will be allowed after April 1. Individual companies will be providing their input to USDA so it can make accurate decisions.
It should also be noted that if we have an early spring, we could see larger crops in 2012, given the lack of snowfall in many areas. If that occurs, more sugar from the crop going into the ground this year would be processed in late August and September, which would add supplies to the current marketing year.
ASGA Annual Meeting -- We had a fantastic annual meeting this year in Orlando, with great speakers on a number of topics key to our industry’s future. Next year we will be meeting in beautiful San Diego from February 3-5 to once again learn about issues impacting our future.
New ASGA Leadership -- Many thanks to former President Russ Mauch (Minn-Dak) for two great years (the maximum term) of excellent leadership. He served the nation’s beet growers well and was an outstanding representative for your interests.
The gavel has now been passed to Kelly Erickson (Red River Valley/ American Crystal); Vice President John Snyder (Washakie Beet Growers/Wyoming Sugar); and Treasurer Don Steinbeisser Jr. (Montana-Dakota Beet Growers/Sidney Sugars). These gentlemen are seasoned and proven industry leaders who are prepared to take on the challenges that lie ahead.