ONE SWEET HARVEST

Publication: Palm Beach Post
Printed: Saturday, April 7, 2001
Written By: Susan Salisbury, Staff Writer

In the midst of a sugar glut in the United States, South Florida’s sugar cane growers are better than ever at what they do.

This year, for the first time ever, the three privately held companies’ production topped 2 million tons of raw sugar. That’s 52 percent of the nation’s sugar produced from sugar cane, the U.S. Department of Agriculture says. Total U.S. sugar production, from both cane and beets, is about 9 million tons a year.

Palm Beach-based Florida Crystals had its biggest crop ever, with 800,000 tons of raw sugar, up from 730,000 tons last year, spokesman Jorge Dominicis said Friday.

The Sugar Cane Growers Cooperative of Florida, a 56-grower Belle Glade group, also produced its company’s largest crop, with 395,868 tons of raw sugar, topping last year’s 363,579, said spokeswoman Barbara Miedema.

U.S. Sugar Corp. in Clewiston doesn’t expect to set a record when it completes its harvest today, but should end up with a whopping 815,000 tons of sugar, said spokeswoman Judy Sanchez. The company has had record-breakers for the three previous season, producing 850,000 tons last year.

The 2 million-ton mark comes at a time when both sugar users and growers agree that the U.S. government’s sugar policies—from price supports to trade agreements—aren’t working. Farmers facing sagging prices for corn, wheat and other crops switched to cane and beets, creating a disaster for the sugar industry.

Sugar prices are hovering at around 21 cents a pound, above what the companies consider their break-even mark, so growers said they do not expect to forfeit their sugar as payback on federal loans, as they did last season. Instead, they plan to sell it.

Last fall, the three companies forfeited 294,000 tons of sugar, part of a 1.1 million-ton forfeiture by cane and sugar beet growers nationwide. The government is holding 794,000 tons of the forfeited sugar in warehouses.

Despite January freezes and a continuing drought, the sugar companies’ production was high because companies first harvested the fields affected most by the freeze before the damage could set in. They also stepped up grinding capacity and, in the case of U.S. Sugar, harvested 24 hours a day.

With agricultural commodities, producing large supplies can sometimes backfire by pushing down prices.

"That’s the essence of the problem with agricultural commodities," said Mark Wade, assistant professor at the University of Florida Indian River Research and Education Center in Fort Pierce. "If you produce a lot of Nike shoes at a factory, it’s a good thing. With agricultural commodities, when you produce more, you drive down the world prices, and you lose."

Agricultural producers have a large percentage of fixed costs and cannot easily switch to another crop, Wade said.

The cooperative’s Miedema said there’s not a surplus worldwide, where demand has outpaced supply in recent years. The U.S. surplus is the result of trade policies that permit the flow of too much foreign sugar into the country, she said.

"It’s not counterproductive for us to be efficient," Miedema said. "If we’re going to compete, we have to make that effort."

Boyd Cruel, a commodities analyst with Alaron Trading Corp. in Chicago, said he didn’t think a large crop would have any impact on futures contracts for domestic refined sugar.

"It doesn’t trade all that much, " Cruel said.

Domestic sugar futures contract volume is about 500 lots a day, vs. 40,000 a day for foreign sugar.