Though hard hit by job loss during the last decade and a half, the U.S. sugar industry still generates more than 142,000 direct and indirect jobs and almost $20 billion in annual revenues.
That was the bottom line of a study released during the American Sugar Alliance’s 28th International Sweetener Symposium, held in August. The study — conducted by LMC International, a global commodity research firm headquartered in London — was an update of a report outlining the sugar industry as of 1993/94. At that time, the numbers were 248,000 jobs and $10 billion in annual economic impact. Low prices in past years appear to be the culprit for the downfall in job, ASA noted, but a recent price recovery accounts for the gain in expenses.
“Sugar prices were so low between 1994 and 2008 that companies were forced to close 37 beet or cane mills across the country,” said Jack Roney, ASA’s director of economics and policy analysis. The good news, Roney added, is that the job loss problem appears to have corrected itself for now, thanks in part to the no-cost sugar policy enacted by Congress in 2008. Under that policy, fewer sugar plants have closed than during any period in the last 20 years.
“In rural areas where beets and cane are grown and processed, these jobs are the life blood of many communities,” Roney said. “In urban areas where cane refineries are located, these good-paying jobs are crucial as well, especially in the tough economic situation the United States now finds itself in.”
Despite past plant closures, producers’ improved efficiency enabled them to sustain sugar production levels. According to LMC data, U.S. production of sugar per worker grew from 119 tons in 1993/94 to 216 tons in 2009/10 — an 80% increase.
LMC examined the jobs associated directly with the planting, cultivating and harvesting of sugarbeets and sugarcane, the processing of the beets and cane, and the refining of raw cane sugar. It then used U.S. Department of Commerce multipliers to estimate the number of indirect jobs generated by the U.S. sugar industry.
Sugarbeets are grown in 11 states and sugarcane in four. Cane sugar refineries are located in six states.
Another new LMC study released at the International Sweetener Symposium indicated that U.S. sugar producers are among the most efficient in the world.
Of the 95 sugar-producing countries or regions examined, the United States is more efficient than 75 of them, LMC found. In fact, Americans are ranked the world’s most efficient beet sugar producers.
LMC updates global cost of production figures regularly, and the current U.S. ranking — 20th lowest cost out of 95 — is its best ever.
“Critics suggest the U.S. sugar industry is not efficient because there are restraints on the amount of subsidized foreign sugar that can enter the country. This study proves we are among the world’s most efficient and lowest-cost producers,” stated ASA’s Jack Roney. “Import restraints are in place in the U.S., as in most sugar-producing countries, because the world sugar market is polluted with substandard production practices, low labor and environmental standards, and huge trade distortions.”
LMC measures efficiency by adding the cost of producing sugar in the field to the cost of extracting sugar from beets and cane at the mill. Production costs vary by seed variety and field practices, degree of mechanization, use of technology and labor and environmental standards. According to the LMC data, the United States has dropped from slightly above-average cost in 2002/03 to well below the world average in 2010/11.
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Editor & General Manager of The Sugarbeet Grower