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Economist warns sugar producers face billion-dollar losses, Congress calls for trade investigation

An ag economist says it’s likely U.S. sugar growers and processors will face significant losses this year without additional trade protections for the industry.

“It’s going to be a big problem, it’s going to be a very, very big problem.”

Shawn Arita with the Ag Risk Policy Center at North Dakota State University tells Brownfield the two-tiered tariff system on sugar imports, which has been in place for more than 30 years, is ineffective.

“Inflation, particularly over the past five years, has been very, very high as we all know, and that has eroded the protective value of that tariff,” he explains.

Arita says inflation has reduced the real value of the fixed duty by nearly half, while out-of-quota sugar imports have surged 700 percent since 2018.

In just the last fiscal year, he says, “We found that depressed our prices by about 5 to 8 cents per pound, that translates to approximately a billion-dollar loss.”

Arita says the impact on sugarbeet growers is even greater, and they’ve been unable to break even for the past few years. Several sugar processors have shuttered in recent years, and sugarbeet growers are cutting back on planted acres this season.

A bipartisan coalition of more than 100 members of Congress is urging the U.S. Trade Representative to open a Section 301 Investigation to address the unfair trade practices.

Producers are also echoing the call for immediate action. American Sugarbeet Growers Association President and fifth-generation Michigan farmer Clint Hagen says it’s gut-wrenching to know growers might lose hundreds of dollars on each acre they’ve just planted as over-quota sugar continues to pour into the U.S.