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Highlights from the December USDA Sugar & Sweeteners Report
The December World Agricultural Supply and Demand Estimates (WASDE) raised U.S. domestic sugar production projections in 2017/18 by 409,000 short tons, raw value (STRV), to 9.245 million STRV. The increase is due to higher recovery rates reported from beet sugar processors early in the slicing campaign that are expected to continue throughout the year. Cane sugar production is unchanged from the previous month’s projection.
U.S. imports in 2017/18 are projected to be 3.326 million, a 384,000-STRV decrease from the November report. Imports from quota programs are raised 42,000 STRV based on increased imports early in the fiscal year. Imports from Mexico are reduced 426,000 STRV to 1.268 million STRV. The reduction reflects a lower U.S. Needs calculation compared with the U.S. Needs calculated from the September WASDE, but it is equal to the Export Limit published by the U.S. Department of Commerce in September, in accordance with the terms of the suspension agreements between the United States and Mexico.
U.S. domestic deliveries are unchanged from the previous month, totaling 12.555 million STRV, including unchanged projected deliveries for food and beverage use that represent a 2.3-percent increase from the 2016/17 estimate. U.S. ending stocks are projected to be 1.802 million STRV, a 27,000-STRV reduction. This translates to a 14.3-percent stocks-touse ratio for 2017/18.
High rates of sucrose recovery result in record beet sugar production projection.
The December World Agricultural Supply and Demand Estimates (WASDE) raised projected total supplies in 2017/18 by 27,000 short tons, raw value (STRV) from the November report, totaling 14.407 million STRV. Domestic production is raised 409,000 STRV, however, to 9.245 million STRV. This is a 3-percent increase from 2016/17 estimates, with beet sugar production accounting for most of the increase.
Beet processors’ reports in the Farm Service Agency’s (FSA) Sweetener Market Data (SMD) show that the slicing of this year’s sugarbeet crop is on track for a very high rate of sucrose extraction. Beet sugar production is projected to be 5.359 million STRV, a 409,000-STRV increase from the previous month based on the raised sucrose rate. If realized, this would be a fiscal year record. The cumulative extraction rate can fluctuate over the slicing campaign, although the rate typically stabilizes beginning in October. During this time processors move from slicing early-season, pre-pile sugarbeets to the slicing of sugarbeets harvested and piled in all production regions during the fall.
The current National Agricultural Statistics Service (NASS) forecast the 2017/18 sugarbeet crop to be the second largest crop, behind the 2016/17 year’s record crop. The historically large sugarbeet crop forecast for 2017/18, combined with high rates of sucrose recovery, results in a projected record crop-year production figure, based on the August-to-July sugarbeet crop year. This projection assumes a shrink rate in line with historical averages, as critical weather periods that affect the quality of piled sugarbeets still lie ahead. Sugarbeet processing regions would benefit from consistent cold conditions throughout the late fall and winter to help store exposed sugarbeet piles and maintain sucrose content. These conditions can evolve over the slicing campaign, potentially affecting both shrink and extraction from slice. Storage conditions will be closely monitored over the coming months and forecasts adjusted accordingly. The fiscal year projection also assumes early-season production from the 2018/19 crop, in line with historical averages. This will be the basis for the early-season outlook until the June WASDE, when May’s planting progress for the 2018/19 crop is known; a key leading indicator for crop yields and crop development.