While some cities and states have for some time been trying to regulate sweetener intake in one way or another, whether it be banning large “sugary” drinks as in New York City or taxing drinks or items with added sugar in several other locales, the potential intensity of those efforts was evident two weeks ago. The bipartisan Sugar Reform Act was introduced in both houses of Congress on Valentine’s Day, and the Center for Science in the Public Interest (C.S.P.I.) filed a 54-page petition calling on the Food and Drug Administration to establish limits on sweeteners in soft drinks, based on the C.S.P.I.’s claim of “substantial scientific evidence that added sugars, especially in drinks, causes weight gain, obesity and chronic disease.”
Speakers at the Feb. 10-13 Colloquium noted that the sweetener industry would face more challenges than just those two in 2013 and later, all with the intent of reducing sweetener consumption, but with much of the impact likely not seen for two or three years.
The public health community “has sugar directly in its sights,” Elizabeth Johnson, a consultant with Food Directions DC, told the group.
“Today, sugar is the latest villain,” Ms. Johnson said, adding that such groups were “more passionate than ever” in their anti-sugar efforts. Sugar has become one of the “negative nutrients” along with saturated fat and sodium, she said.
Ms. Johnson said she thought the likelihood was “not high” that the F.D.A. would agree with the C.S.P.I. petition. One of the difficulties in establishing sweetener limits is that testing can’t determine between added and natural sugar, she said.
Michelle Albee Matto, a consultant with AM Food and Nutrition, said she did not anticipate specific sugar restrictions to be part of the 2015 Dietary Guidelines, for which the review process was under way. But, she noted, the U.S. Department of Agriculture will get the message from consumer groups during the public comment period, and that the Dietary Guidelines serve as the “basis” for many food programs.
While any impact on sugar consumption from consumer groups or government res-trictions may be years away, the sugar industry is facing an immediate impact from surplus supplies in the United States and Mexico. U.S. bulk refined sugar prices currently below 30c a lb are down more than 50% from September 2010 highs near 65c a lb and are close to five-year lows.
While sugar users, including bakers, beverage, candy and food manufacturers, welcome the lower prices after several years of historically strong values, for sugar producers the lows are coming at a most inopportune time because of delayed legislative action in creating a new farm bill last year. Instead, the 2008 farm bill was extended through September 2013. Had a new bill passed last year, producers felt relatively “safe” because the sugar program in the 2008 farm bill had operated at no cost to the government, as it was designed to do.
But as U.S. sugar prices approach U.S.D.A. loan levels (18.75c a lb for raw cane and 24c a lb for refined beet sugar nationally, with regional vari-ations), the consensus among speakers and attendees at the Colloquium was that 2013 will be the first year for a long time that the sugar program will “cost” the government money, at a time when a new farm bill may be under discussion in Congress.
Should sugar prices drop a few more cents, the farm bill’s Feedstock Flexibility Program will be implemented — for the first time — later in 2013 under which the U.S.D.A. must buy excess sugar from producers and sell it to ethanol producers “for what they can get.” The idea is to divert sugar from food use to supplement ethanol production, thereby preventing sugar producers from forfeiting supply under the U.S.D.A.’s loan program.
When asked what that price may be, Geoff Cooper, vice-president of research and analysis at the Renewable Fuels Association, said at the Colloquium he thought the price would have to be in the 10@12c a lb range to “see interest” from ethanol producers. The U.S.D.A. would pay the difference between that and their likely purchase price in the mid-20s.
While the flexible fuel program is seen as a benefit to sugar producers because it actually removes excess sugar from the market rather than simply delaying the marketing of excess sugar at lower prices under the traditional loan program, it creates a cost for the U.S.D.A., likely fueling support for proponents of sugar program reform in the new farm bill.