Could America run out of sugar?

Answers to your questions about the news.
Aug. 14 2009 6:22 PM

Sweet Is Low

Could America run out of sugar?

Cookie. Click image to expand.
Are cookies endangered?

Prominent American food companies, including Kraft, General Mills, and Hershey, have warned the Department of Agriculture that there's a deficit in the sugar supply and that we could " virtually run out" in the near future. After the Wall Street Journal and a number of other news sources picked up the story, the American Sugar Alliance countered that we're far from a shortage; in fact, we have a surplus. Could we ever really run out of sugar?

No way. American sugar producers churn out approximately 8.5 million metric tons per year. The USDA also allows about 1.3 million metric tons to cross our borders from 40 different sugar-producing countries, and, under NAFTA rules, an unlimited amount from Mexico. (Mexican imports will be about 1.45 million tons for the current fiscal year.) Since American consumers use only about 10 million tons in a year, producers frequently end up with excess sugar, which is then stockpiled in warehouses. If producers couldn't keep up with demand—due to poor growing conditions or a change of policy in Mexico, say—they would first dip into these stockpiles. If there were still a shortage, the USDA would simply increase its import quotas. In 2006, after back-to-back-to-back hurricanes (Katrina, Rita, Wilma) during the 2005 growing season, the USDA became worried about the domestic sugar supply and promptly pushed up the yearly limit. Most Americans never noticed.

Advertisement

Candy companies in the United States are flipping out because there is a sugar deficit outside the country—a result of Brazil using more cane for ethanol and drought in India. Consequently, prices on the global market for surplus sugar have skyrocketed to a 28-year high. But the United States does not import from this market—we buy directly through preset trade agreements—so those prices do not directly affect domestic rates.

Even if global supply problems persist and we start experiencing domestic sugar shortages, it's still unlikely that the U.S. consumer will need to downgrade from Snickers to Snickers Fun Size. Since Americans have such high purchasing power, it's in the interest of foreign producers to cut off their own people and ship everything they have over here. Sugar prices could, theoretically, go up in such a scenario, but in real life they've actually gone down over time. During Jimmy Carter's presidency, refined wholesale sugar—the kind manufacturers like Kraft use—cost 38.3 cents a pound. As of July 2009, it cost 35.4 cents. Factoring in inflation, sugar is 59 percent cheaper than it was 30 years ago.

Some countries keep physical reserves of certain key commodities in case of shortage. China, for example, established a sugar-reserve system in 1991 and has a stockpile of 2.8 million metric tons. In this country, since the Agricultural Trade Act of 1980, we have a trust that provides cash for storage or to purchase commodities during an emergency. At this time, we have $310 million set aside for purchasing, but no actual physical reserves.

Since the rise of industrial agriculture, true food shortages are virtually nonexistent in technologically advanced countries. When you read about food "shortages" in the news, it usually means there's a problem of distribution that can be solved through politics, rather than a problem with the actual supply. Before World War II, the United States did experience food deficits from time to time. In the 1860s and 1870s, for example, a locust outbreak led to a wheat shortage. At that time, the USDA was in its infancy (it dates to 1862), and the federal government wasn't in the habit of stepping in during a crisis, but local agricultural colleges pushed farmers to start using chemical insecticides, and affected communities changed their diets—they ate more turnips and carrots.

Got a question about today's news? Ask the Explainer.

Explainer thanks Jonathan Groveman of the USDA, Phillip Hayes of the American Sugar Alliance, and Slate contributor James E. McWilliams of Texas State University—San Marcos.

Juliet Lapidos is a former Slate associate editor.

TODAY IN SLATE

Politics

Smash and Grab

Will competitive Senate contests in Kansas and South Dakota lead to more late-breaking races in future elections?

Even When They Go to College, the Poor Sometimes Stay Poor

Here’s Just How Far a Southern Woman May Have to Drive to Get an Abortion

The Most Ingenious Teaching Device Ever Invented

Marvel’s Civil War Is a Far-Right Paranoid Fantasy

It’s also a mess. Can the movies do better?

Behold

Sprawl, Decadence, and Environmental Ruin in Nevada

Space: The Next Generation

An All-Female Mission to Mars

As a NASA guinea pig, I verified that women would be cheaper to launch than men.

Watching Netflix in Bed. Hanging Bananas. Is There Anything These Hooks Can’t Solve?

The Procedural Rule That Could Prevent Gay Marriage From Reaching SCOTUS Again

  News & Politics
Foreigners
Oct. 20 2014 6:49 PM God’s Oligarch One of Vladimir Putin’s favorite businessmen wants to start an Orthodox Christian Fox News and return Russia to its glorious czarist past.
  Business
Moneybox
Oct. 20 2014 6:48 PM Apple: Still Enormously Profitable
  Life
Outward
Oct. 20 2014 3:16 PM The Catholic Church Is Changing, and Celibate Gays Are Leading the Way
  Double X
The XX Factor
Oct. 20 2014 6:17 PM I Am 25. I Don't Work at Facebook. My Doctors Want Me to Freeze My Eggs.
  Slate Plus
Tv Club
Oct. 20 2014 7:15 AM The Slate Doctor Who Podcast: Episode 9 A spoiler-filled discussion of "Flatline."
  Arts
Brow Beat
Oct. 20 2014 6:32 PM Taylor Swift’s Pro-Gay “Welcome to New York” Takes Her Further Than Ever From Nashville 
  Technology
Future Tense
Oct. 20 2014 4:59 PM Canadian Town Cancels Outdoor Halloween Because Polar Bears
  Health & Science
Medical Examiner
Oct. 20 2014 11:46 AM Is Anybody Watching My Do-Gooding? The difference between being a hero and being an altruist.
  Sports
Sports Nut
Oct. 20 2014 5:09 PM Keepaway, on Three. Ready—Break! On his record-breaking touchdown pass, Peyton Manning couldn’t even leave the celebration to chance.