Congressman, confectioners: Sugar pricing should be reformed

June 23, 2011
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Left to right: Ken Jarosch, Jarosch Bakery; Lisa Samuels, Kraft Foods; Rick Blommer, Blommer Chocolate; Congressman Robert Dold; Bill Kelley, Jelly Belly; and Tim Schmitt, Deerfield’s Bakery.Photo by Crystal Lindell.

When Blommer Chocolate was making expansion decisions recently, company officials decided to steer clear of its existing plants in the United States. The determining factor didn’t involve labor costs. Rather, it was raw materials – specifically sugar.
Rick Bloomer, vice president, says the sugar pricing policies in the states influenced the company to instead expand a plant in Ontario, Canada, where the commodity is cheaper.

Blommer was among a group of industry experts who recently attended a roundtable discussion at the Jelly Belly Candy Co. plant in North Chicago about the proposed Free Sugar Act (H.R. 1739). During the event, confectioners, bakers and Congressman Robert Dold (R-Ill.), the primary sponsor of the measure, talked about the importance of seeking a change.

The Act would reform the pricing methods for sugar in the United States, where it currently is subject to price control, tariffs, and import quotas.

Jelly Belly Candy Co. has been working to reform the pricing methods for sugar in the U.S. for more than 30 years, says Bill Kelley, vice chairman of Jelly Belly. He’s hopeful that it’s finally time for a change.

“I find it interesting that there are four bills in congress right now on sugar, which in my mind is unprecedented,” he explains. “I can’t remember this broad of support for changing the sugar portion of the agriculture bill before.”

Kelley and Blommer say they both expect a fight in Congress though, where sugar-industry lobbyists target a range of lawmakers, including those without sugar-growers in their districts.

“If prices stay high into 2012, it will defiantly be stimulating people to do something different [though],” Kelley explains.

Dold points to U.S. Department of Commerce data, which shows that an estimated 112,000 jobs were lost in American sugar-using industries between 1997-2009 due in part to the pricing structure.

“We know that we need regulation. We want it to be smart regulation, not just more of it,” Dold says. “For every job that it’s supposed to save, it destroys three others.”

Dold’s bill is co-sponsored by Earl Blumenauer (D-Ore.) and Jim Moran (D-Va.) and is a companion to Senate Bill 685, introduced by Sen. Richard Lugar of Indiana.
In a move that highlights the urgency of the issue, the U.S. Department of Agriculture (USDA) did announce this week plans to for a second time increase the 2011 raw sugar tariff rate quota (TRQ).
However, the Sweetener Users Association stated in a media release that it was still concerned about sugar levels.

“In an undersupplied market with record, or near-record prices, every additional ton of sugar is helpful,” reads a release from the association. “We remain concerned that because [the] USDA may currently be overestimating available supplies and underestimating actually demand, this TRQ increase may not result in fully adequate stocks.”

The association suggested further adjustments to the TRQ, including early entry for the 2012 TRQ, and late entry of the 2011 TRQ, which the USDA did last year.

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