'Take Home' Messages

    Luther Markwart focused on “take home” messages in his summary remarks toward the conclusion of this year’s American Sugarbeet Growers Association annual meeting.  “What do we tell our growers? What do we do as leaders of this industry?” ASGA’s longtime executive vice president asked the local and regional grower association leaders in attendance.

Luther Markwart

    First, he noted, several key points deserve repeated emphasis when visiting either with fellow growers, government decision makers or the public in general:
    • “This sugar policy has been [operated] at no cost to the taxpayer for 11 years.”
    • The U.S. sugar industry accounts for 142,000 jobs.
    • “We generate $20 billion into the economy” per year.
    • “It provides food security, because 70% of all the foods you buy in the store, off the shelf, have sugar in them.  So if you have a sugar supply problem, you have a food security problem.”
    • The United States is the world’s largest importer of sugar.
    • “We have to respond to unfair foreign trade practices.”
    • And finally, “the one message that is really resonating on Capitol Hill right now is that Europe went through a major reform of its sugar policy.  They shut down 84 factories, lost more than 100,000 jobs — and now their prices are higher and they have supply issues.  The message is:  ‘Don’t do what Europe did.  Don’t make the mistakes they made.’ ”
    Markwart then provided an overview of international trade issues upon which ASGA is focused in 2013.  He began with the World Trade Organization (WTO), whose longstanding priorities have included: (1) reducing domestic supports; (3) eliminating export subsidies; and (3) increasing market access, eliminating import tariffs — and, particularly for the least-developed-countries section, “get duty-free, quota-free access to our markets — which would be devastating for us.”
    There’s not much sugar-related movement going on within WTO at present, Markwart noted.  “But we’re watching it.  We watch it every year.”
    The closer focus right now is the Trans-Pacific Partnership (TPP).  The TPP umbrella currently encompasses 11 countries, including Australia, Vietnam, New Zealand, Singapore and Malaysia, as well as Chile, Peru, Mexico, Canada and the United States.  Australia, which annually exports about 4.0 million tons of sugar, is an immediate concern.  “In the U.S.-Australia Free Trade Agreement, we did not give them any additional access,” Markwart pointed out.  “And we do not want any additional access in this market for Australia.”
    “Regional cummulation” refers to a way for a country like Australia to potentially maneuver around such restrictions.  If the U.S. denies any further access, the Australians could, for instance, set up a facility in New Zealand, ship raw or refined sugar into that country — “and maybe blend in some cocoa products and others that cause it then to become an ‘origin of New Zealand,’ ” Markwart stated.
    Another potential concern with TPP would be countries like Thailand or the Philippines.  What happens if their production expands and they seek more access to international markets (e.g., the United States)?
    “We talk about all the oversupply issues we have in our market today and what that’s doing to price, “ Markwart continued.  “Well, if you’re ever going to  have a problem with depressed price and oversupply, now is the ‘perfect’ time to have it — when you’re trying to pass a farm bill and you can show: ‘Look, we need a safety net.  Things today aren’t like they were three or four years ago.  And [that safety net] has to be adequate enough for us to sustain our production.
    “So the message to both farm policy and our trade negotiators is: this market can’t take more sugar.”

    Markwart’s update on sugarbeet crop insurance reflected significant progress in that arena.  He noted that stage removal is now complete, which is very good news.  Regarding replant coverage, the previous formula (1.5 x price election) now has been changed to a fixed amount ($80 per acre) for the 2013 crop.  The prior formula was fine as long as price election and prices were strong.  But what happens in a situation like the current one, where prices are down — but input costs obviously will not be?  “It needed to get fixed to protect you in years to come,” the ASGA leader told growers.  “We do have the ability, in future years, to show that the number needs to be higher than what it is now,” he added.
    The field pile (clamp) pilot project — utilized in Michigan and southern Minnesota — is now covered for the entire insurance period (through mid-November), Markwart reported.  Also, if other beet-growing areas wish to begin utilizing field clamps, “that pilot can be expanded.”
    The news in price election also is very positive.         
    “Every year, [when] we were going into the increase in sugar prices, USDA was always lagging behind in terms of having price elections that reflected what was going on in the marketplace,” Markwart noted.  Input from John Doxsie, president of United Sugars Corporation, helped USDA’s Risk Management Agency to update those elections based on current market realities.  As a result, estimated additional guarantees are $43.00 per ton for the 2009 year, $43.75 for 2010, $47.50 for 2011 and $59.85 for 2012.  “For 2013, they’ve dropped a little bit (to $58.95 a ton),” Markwart said.  “That’s only a 90-cent reduction; and in this market, I think that’s pretty good.”
    The ASGA executive vice president’s final discussion area centered on biotechnology — specifically the long and circuitous legal route for Roundup Ready® sugarbeets.  “”We’ve been through five years of litigation; we had four cases, three appeals, three courts and six different judges looking at the issues,” he observed.  “We also had an 800-page Environmental Impact Statement.” 
    While deregulation of Roundup Ready beets has occurred and growers continue having full access to these transgenic varieties, that does not mean the matter has been relegated to the history books, Markwart emphasized.  “Now we need to continue to focus on stewardship: weed resistance and bolter destruction,” he affirmed.  “We also have to oppose restrictions on planting the seed crop in Oregon.”  Prospective labeling ballot initiatives in states like Washington are on ASGA’s radar screen as well.
    “”I am going to do everything I can to make sure they never take this technology away from us,” Markwart concluded.   

---