Large 2013 crop hampered by poor prices

LAFAYETTE, LA. – Jim Simon, manager of the American Sugar Cane League (ASCL), said the 2013 sugarcane crop was, from a production stand point, one of the best in the 219-year history of Louisiana sugarcane farming despite two hard freezes during the harvest.

"The success of this crop is due to the excellent research program we have in Louisiana, the efficiency of our 11 sugar mills and the skill of our sugarcane farmers,” Simon said. "The Louisiana sugarcane farmer is among the best in the world.”

The 2013 crop produced 1.59 million tons of raw sugar from 409,000 harvested acres. The cane production per acre was 34.3 tons which produced an average of 7,771 pounds of raw sugar per acre.

"While sugar production was good, the true measure of a successful crop rests ultimately with the financial performance of our industry,” Simon said. "To that end, despite the efficiencies of our farmers and millers, this one will rank quite low in profitability as sugar prices are at their lowest in 30 years and input costs are through the roof.”

Simon said domestic sugar market is oversupplied right now because of Mexican imports.

The North American Free Trade Agreement (NAFTA) allows Mexico to ship as much sugar into the United States market as they want to,” Simon said. "The result is oversupply and depressed prices. How low? Early in 2012, the price for sugar was about 30 cents a pound. By the end of 2013, sugar prices returned to the 21 cents per pound range — the same price farmers got 25 years ago.”

Simon made his comments February 4 at the ASCL annual membership meeting at the Hilton Lafayette in Lafayette, La. The ASCL meeting was held in conjunction with the semi-annual meeting of the American Society of Sugar Cane Technologists (ASSCT).

The ASCL is comprised of Louisiana sugarcane growers and the state’s 11 sugar mills from the 23-parish area collectively known as the Sugar Belt.

Jack Roney, director of economics and policy analysis for the American Sugar Alliance, and Jim Wiesemeyer, vice president of the prestigious Informa Economics commodity, food industry and agribusiness research and consulting firm, were the featured speakers at the annual meeting.

Roney said the United States sugar market is oversupplied but not because of U.S. sugarcane or sugar beet overproduction. Roney laid the blame for depressed prices squarely at the foot of the NAFTA.

"Since NAFTA began in 1993, American sugar production acreage has gone down while Mexican acreage increased,” Roney said. "As Mexican production acreage increased, Mexican consumption has gone down and they’ve sent Mexican sugar into the U.S. without restriction, which hurts American farmers.”

Roney said the American market could have absorbed as much as 750,000 tons of Mexican sugar in 2013 without it having an adverse effect on the market, but Mexico shipped more than 2.1 million tons of sugar to the United States last year.

"That’s why sugar mills are forfeiting sugar to the government,” Roney said. "The Mexican market price was actually higher than the U.S. price, but they kept their price high by sending their sugar to the United States. Clearly, the Mexican government needs to be more rational in regards to their sugar market and NAFTA.”

"The Mexican government owns one-fifth of the Mexican sugar industry so when business is bad and a Mexican sugar mill is about to go out of business, the Mexican government says, ‘No.’ In the United States, when a sugar mill is about to fail, it fails. The truth is the American farmer and miller is not competing with the Mexican famer, they’re competing with the Mexican government.”

Roney did allow that the Mexican government was cognizant of the problems with their sugar industry.

"The Mexican government has pledged to send all of its sugar exports this year to the world market and not to the U.S. That’s wonderful. I hope they come through with that,” Roney said. "The Mexican sugar industry signed a letter urging the Mexican government to adopt some kind of price-stabilization program. Ultimately, we’re not trying to change NAFTA, we’re just trying to get the Mexican government to act more rationally.”

Wiesemeyer’s said the sugar industry has been represented well in Washington, D.C.

"You’ve been successful on the national scale because you are 100 percent united in interacting with Congress, the administration, the press and fellow farm organizations,” Wiesemeyer said. "You work Congress each year as if there were a farm bill being considered that year. You’re politically engaged and you’re a sold group both in Washington and on the grass roots level. You know you have to educate policymakers continually. You have to educate and that takes time. You get farmers up there and they educate.”

Wiesemeyer identified the issues facing the sugar industry in short, medium and long terms.

"Short term, there is a supply glut and low prices,” Wiesemeyere said. "That’s short term. Medium term, there will be pressure for more trade agreements with Pacific Rim countries and the European Union. Australia will probably get some concessions.”

Long term, Wiesemeyer predicted the strongest threats to the sugar industry will come from the food manufacturing industry.

"The food industry is spending millions to find a ‘natural’ substitute product for sugar,” Wiesemeyer said. "They know they can’t defeat sugar policy so they’re spending millions to find a substitute. You should be just as ferocious monitoring diet book claims to see if they pass the truth test. Be forewarned: the diet area; that’s your long term issue.”

ASCL President Mike Daigle honored Louisiana agriculture professional Willie Cooper with the President’s Award. Cooper, the state’s executive director of the United States Department of Agriculture Farm Service Agency, has served Louisiana agriculture for 56 years. Cooper began his long career as a field reporter in 1957. He rose through the FSA ranks until he was appointed state executive director in 1972, a presidential appointee position he held under the administrations of eight presidents.

"Mr. Cooper has tirelessly served all state farmers through hard times and good times,” Daigle said. "I’m proud that the ASCL chose to honor him.”

The ASCL also re-elected Daigle to a second one-year term as president of the organization. Daigle is chief executive officer of Lula-Westfield LLC, an organization that operates two sugar mills in Assumption Parish. Daigle will preside over a 46-member board of directors that is comprised of 22 producer members, 11 processor members, 11 at-large members designated by the processors and two landlord members.

Iberville/West Baton Rouge Parish grower Travis Medine was elected to replace Robert Judice as a grower member on the board of directors. Judice, a fourth generation sugarcane farmer, has served on the board since 1989.

Also, Glen Judice of Louisiana Sugarcane Co-Operative, Inc. in St. Martin Parish will replace Jeff Broussard, also of LASUCA as an at-large member. Broussard joined the board in 2009.

The ASCL held its annual meeting in conjunction with the American Society of Sugar Cane Technologists. The ASSCT deals with the agricultural and manufacturing aspects of the sugar industry and is comprised of two major branches, the Florida and Louisiana Divisions. The ASSCT also publishes scientific papers in their annual Journal of the American Society of Sugar Cane Technologists.

ASSCT president Mike Comb and Dr. Rogers Leonard with the LSU AgCenter recognized Dr. Bob Falgout and Jesse Breaux as honorary members of the organization for their contributions to the continued success of the Louisiana the sugar industry.