Background
U.S. Sugar
Production
The United States is among the world's largest sugar producers.
Unlike most other producing countries, the United States has both
large and well-developed sugarcane and sugar beet industries. Since
the mid-1990s, sugarcane has accounted for about 45 percent of the
total sugar produced domestically, and sugar beets for about 55
percent of production. U.S. sugar production expanded from an early
1980s' average of 6.0 million short tons, raw value (STRV) to an
average 8.1 million STRV in the 2000s. The production increases are
due to a substantial investment in new processing equipment, the
adoption of new technologies, the use of improved crop varieties,
and acreage expansion (because of higher prices for sugar relative
to alternative crops).
Sugarcane and sugar beet yields can vary widely
from year to year because of weather, but both have tended to grow
over time. The growth of sugarcane yields has been particularly
impressive in Florida and Louisiana because of varietal
improvements, investments in improved harvesting technologies, and
other technological changes. Sugar beet yields have ranged from a
low of 18.6 short tons per acre in fiscal year (FY) 1993 to an
average of 26 tons per acre in FYs 2007-09.
The number of farms growing sugarcane and sugar
beets declined from 2002 to 2007, but the average area
harvested per farm increased. According to the 2007 Census
of Agriculture, the number of farms growing sugar beets and
sugarcane decreased from 5,980 in 2002 to 4,714 in 2007. The number
of farms growing sugar beets declined from 5,027 to 4,022, while
average area harvested per farm rose from 272 to 312 acres. The
number of sugarcane farms dropped from 953 to 692, while average
area harvested grew from 1,027 to 1,224 acres per farm. (See 2007
Census maps, Sugarbeets for Sugar, Harvested Acres
and Sugarcane for Sugar, Harvested Acres
.)
Sugarcane production. Sugarcane is one of the essential raw
material sources of manufactured sugar in the United States.
Sugarcane, a tall perennial grass, is grown in tropical and
semitropical climates. After the planting of cane stalk cuttings,
the plant matures in 1-2 years. Two to four crops are harvested
from the original plantings, unless the plants are impaired or
destroyed by frost, disease, or other causes. Once harvested,
sugarcane must be processed quickly before its sucrose
deteriorates.
In the United States, sugarcane is produced in Florida,
Louisiana, Hawaii, and Texas. Acreage of sugarcane for sugar rose
from an average 704,000 acres in the first half of the 1980s to
898,000 acres in the 2000s. Over the same period, sugar produced
from sugarcane grew from 2.910 million STRV to 3.609 million
STRV.
Florida's sugarcane production has expanded significantly since
the United States ceased importing sugar from Cuba in 1960. Florida
is the largest cane-producing region in the United States. Most of
the sugarcane is produced in organic soils along the southern and
southeastern shore of Lake Okeechobee in Southern Florida, where
the growing season is long and winters are generally warm. Florida
produced an average 1.80 million STRV of sugar in the 2000s.
In Louisiana, the northernmost cane-growing State, sugarcane
production has been largely confined to the Delta, where soils are
fertile and the climate is warm. However, the sugar industry in
Louisiana has expanded northward and westward into nontraditional
sugarcane growing areas. Most of the expansion in sugarcane acreage
in recent years has occurred as returns for competing crops, such
as rice and soybeans, have decreased. Louisiana production has also
expanded because of the adoption of high-yielding sugarcane
varieties, along with investments in new harvesting combines.
Louisiana produced an average 1.38 million STRV of sugar in the
2000s.
Texas sugarcane is produced in the lower Rio Grande Valley in
the southern tip of the State. The area has a subtropical
climate--long, hot summers and short, mild winters. Killing freezes
are a recurrent threat, and hurricane and drought have
significantly reduced production in some years. Production of
sugarcane in Texas resumed with the 1973 crop after years of
inactivity. During the 1980s, total harvested area averaged about
35,000 acres and varied little. Sugarcane production averaged about
100,000 tons per year for the same period, but varied from year to
year because of changes in yields. FY 2001 saw a 50-percent
expansion in sugarcane acreage from the previous year. Area
harvested averaged about 42,000 acres in the 2000s, and sugar
produced averaged 174,000 STRV.
Hawaii's sugarcane production until recently was spread across
the islands of Hawaii, Kauai, Maui, and Oahu, but closures of
processing plants and competing uses for sugar land have reduced
sugar production to two mills on Maui and Kauai. Sugarcane area
harvested in Hawaii decreased from close to 100,000 acres in FY
1981 to an average 20,700 acres in the 2000s. The State's sugar
production declined from over 1.0 million tons in the first half of
the 1980s to 238,000 tons in the 2000s.
Sugar beet production. Sugar beets are
the other leading raw material for manufactured sugar in the United
States. Sugar beets, a sturdy crop grown in a wide variety of
temperate climatic conditions, are planted annually. Sugar beets
can be stored for a short while after harvest, but must soon be
processed before sucrose deterioration occurs. A recent development
has been the introduction of genetically modified (GM) seed
varieties. In the 2009/10 crop year, GM varieties accounted for
about 95 percent of planted area, up from about 60 percent in
2008/09.
Basically, sugar beets are grown in five regions encompassing 11
States, and tend to be grown in rotation with other crops. Two of
the regions are east of the Mississippi River, while the three
other areas are in the Great Plains and Far West. The western
regions represent dryland farming that depends on irrigation as a
primary water source. The eastern regions depend on rainfall.
Historically, sugar beet yields in the western areas have tended to
be higher than in the east. However, with the adoption of new
disease-resistant and GM seed varieties, yields in the eastern
areas are much closer to those in western areas. In all areas,
sugar production is enhanced by technologies that allow the
desugaring of molasses that, otherwise, would be a relatively
low-value byproduct.
The largest and most dynamic region for sugar beet production is
in or close to the Red River Valley of western Minnesota and
eastern North Dakota. Area planted in the Red River region grew
consistently through the 1990s and averaged 731,000 acres in the
2000s, or about 55 percent of total planted U.S. sugar beet
acreage. Long, cold winters aid the storage of sugar beets
harvested in October and allow the slicing of sugar beets well into
the following spring, thereby making more efficient use of slicing
capacity at the factories. A second area of sugar beet production
is in Michigan. Area planted in this region in the 2000s averaged
163,000 acres, or about 12 percent of total U.S. acreage.
Sugar beet production occurs in the Upper Great Plains (north
central Wyoming, Montana, and western North Dakota) and Central
Grain Plains (southeastern Wyoming, Colorado, and Nebraska). Area
planted in the Great Plains has averaged 183,000 acres, or about 14
percent of national area planted.
Sugar beet production in the Northwest occurs in Idaho,
Washington State, and portions of Oregon. Area planted for the
2000s has averaged about 202,000 acres, or about 15 percent of the
total area planted. California comprises the Far Western region
with an average area planted of only 25,000 acres in recent years.
Area planted in the Far Western region has contracted from about
100,000 acres in the 2000 crop year to about a quarter of that
total in following years because of the closure of three out of
four processing plants in California.
Annual cash
receipts. Cash receipts for U.S. sugar growers vary
with sugar yields and prices. Cash receipts for sugar beets were
$1.507 billion in the 2006/07 crop year and $1.335 billion in the
2007/08 crop year. Sugarcane cash receipts were $849 million in the
2006/07 crop year and $837 million in the 2007/08 crop year. On
average, the sugar crops account for 1 percent of the cash receipts
received by U.S. farmers for all agricultural commodities.
U.S. and World Sugar
Prices
The two key sugar prices in the United States are the raw cane
sugar price and the refined beet sugar price. The raw cane sugar
price is based on the price of sugar delivered to New York and is
quoted at the New York Board of Trade as the Sugar Number 16
(domestic) Contract. There is no futures market for U.S. refined
sugar, but a price range for wholesale Midwest refined beet sugar,
free on board (FOB) factory, is quoted each week in Milling and
Baking News. During the 2000s, the raw sugar price has ranged
between a low average of 19.09 cents a pound in 2000 and a high
average of 22.14 cents a pound in 2006. The wholesale beet price
has, likewise, ranged from an average of 20.80 cents a pound in
2000 to an average of 33.10 cents a pound in 2006.
U.S. sugar prices have been well above world prices since 1982
because the U.S. Government supports domestic sugar prices through
loans to sugar processors and a marketing allotment program. (For
further discussion, see the Policy chapter). The raw cane sugar price, which
is based on a bulk spot price for sugar stowed in Caribbean ports,
including Brazil, is quoted at the New York Board of Trade as the
Sugar Number 11 (world) Contract. The raw cane sugar price has
averaged about 10.43 cents a pound during the 2000s.
A world refined sugar price, the Number 5 Contract on the London
International Financial Futures and Options Exchange, is based on
the London daily spot market price for refined sugar FOB ship in
European ports. The refined beet sugar price has averaged about
12.71 cents a pound during the 2000s.
High-Fructose Corn Syrup
Production and Prices
High fructose corn syrup (HFCS) is one of several
products--along with glucose, dextrose, corn starch, ethanol, and
other products--derived from the wet milling of corn. U.S. corn
refiners produce high fructose corn syrup by first converting corn
starch to a syrup that is nearly all dextrose. Enzymes isomerize
the dextrose to produce a 42-percent fructose syrup called HFCS-42.
By passing HFCS-42 through an ion-exchange column that retains
fructose, corn refiners draw off 90-percent HFCS and blend it with
HFCS-42 to make a third syrup, HFCS-55.
Demand for HFCS is driven by demand for products that use the
syrups as inputs. For HFCS-55, the major use is in the beverage
industry, which demands over 90 percent of total domestic
deliveries. Major food users of HFCS-42 include the beverage
industry (41 percent), processed food manufacturers (22 percent),
cereal and bakery producers (14 percent), multiple-use food
manufacturers (12 percent), the dairy industry (9 percent), and the
confectionery industry (1 percent). Growth in these sectors has
typically accounted for growing sales of HFCS-55 and HFCS-42.
Supersweet HFCS-90 is used in natural and "light" foods where very
little is needed to provide sweetness.
Domestic production of HFCS increased from 2.2
million short tons in 1980 to an average of 9.2 million tons, dry
weight, during the 2000s as HFCS replaced more expensively priced
sugar in a variety of uses. In 1997, corn used to produce HFCS
broke through the 500-million bushel level. It is estimated that,
in the 2000s, about 511 million bushels of corn, or about 4.7
percent of the total U.S. corn crop, has been be used to produce
HFCS.
U.S. Sweetener
Deliveries
Deliveries of sugar and other sweeteners have averaged about 21
million tons during the 2000s. Other sweetener deliveries include
corn sweeteners (high fructose corn syrup, glucose syrup, and
dextrose), honey, maple syrup, and other edible syrups but exclude
the deliveries of noncaloric sweeteners.
Per capita deliveries of caloric sweeteners increased by 32
pounds, or 27 percent, from 1970 to 151.4 pounds in 1999. Since
1999, per capita sweetener deliveries decreased by 14.3 pounds to
137.1 pounds in 2008. Sugar and sweeteners have maintained a 36- to
40-percent share of the steadily growing U.S. per capita
consumption of carbohydrates.