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USDA Sugar and Sweeteners Outlook


20 April 2012

USDA Sugar and Sweeteners Outlook April 2012USDA Sugar and Sweeteners Outlook April 2012

On March 30, 2012, the National Agricultural Statistics Service (NASS) published Prospective Plantings, with forecasts included for planted-area intentions for the 2012/13 U.S. sugarbeet crop. Planted area is forecast at 1.241 million acres. While this amount is less than a percentage point above last year’s realized planted area of 1.233 million acres, it is 4.6 percent above last year’s intended area projected in March 2011.
USDA Sugar and Sweeteners Outlook

With the assumption of normal growing conditions, the U.S. Department of Agriculture (USDA) expects an additional 130,000 short tons, raw value (STRV) of beet sugar production to occur before the end of the fiscal year (FY) 2012 for a total of 4.655 million STRV.

There were no changes from last month for FY 2012 cane sugar production.

The USDA reduced its forecast of sugar imports from Mexico by 385,000 STRV to 730,000 STRV. Mexican exportable supply is lower due to lower than expected production (100,000 metric tons), increased domestic demand (188,000 metric tons), and increased ending stocks (41,000 metric tons).

U.S. ending sugar stocks, forecast as the difference between projected total supply and total use, are projected at 797,000 STRV. This level implies an ending stocks-to-use ratio of 6.8 percent, down from the 9.0 percent projected last month.

Prospective Plantings and Beet Sugar Production

On March 30, 2012, the National Agricultural Statistics Service (NASS) published Prospective Plantings, with forecasts included for planted-area intentions for the 2012/13 U.S. sugarbeet crop. Planted area is forecast at 1.241 million acres. While this amount is less than a percentage point above last year’s realized planted area of 1.233 million acres, it is 4.6 percent above last year’s intended area projected in March 2011. Regional expansion plans include the following increases: 6.2 percent in Michigan, 5.7 percent in the Red River Valley (Minnesota and North Dakota), and 3.3 percent in the Far West (Idaho, Oregon, and California), but only 0.1 percent in the Great Plains (Colorado, Montana, Nebraska, and Wyoming).

While the USDA does not forecast 2012/13 beet sugar production until the May WASDE, the NASS projection has implications for 2011/12 beet sugar produced prior to October. Figure 1 shows national beet sugar per harvested acre on a September/August crop year for the last 6 years. (These past 6 years correspond to a period of higher sugarbeet yields resulting from expanded widespread use of disease-resistant seed varieties.) Beet sugar per acre in 2011/2012 was below average because of difficult growing conditions, while the 2010/11 beet sugar per acre was much above average due to early planting and excellent growing conditions. Excluding these 2 years, beet sugar yield has averaged 3.93 tons per acre. Applying this average to expected area harvested (98.65 percent of area planted) results in a preliminary estimate of 4.811 million short tons, raw value (STRV).

The September beet sugar crop is a positive function of overall crop year production (fig. 2). The relationship suggests a range of production figures, averaging around a midpoint average of 352,400 STRV, or 7.325 percent of the total. Because this amount is about 130,000 STRV more than the 223,200 STRV produced in September 2011, it is added to the crop year projection of 4.525 million STRV to produce a new fiscal year total of 4.655 million STRV.

Diminishing Effect of Sugarbeet Prices on Sugarbeet Planted Area

In February, NASS published State-level sugar prices for the 2010/11 crop year. On a national level, the sugarbeet price increased 29.5 percent to a record $66.07 per ton. All regional prices were at record levels as well: $71.30 per ton in Michigan – a rise of 17.3 percent from the previous year; $68.35 per ton in the Red River Valley region - a rise of 35.5 percent; $57.30 per ton in Idaho and Oregon - a rise of 27.1 percent; $68.58 per ton in the Great Plains - a rise of 27.3 percent; and $65.00 per ton in California – a rise of 2.5 percent. In spite of these increases, area intended for planting in 2011/12 did not expand much – only 1.1 percent. Larger expansions in actual plantings (especially in Michigan and the Red River Valley region) were a reaction to very wet and sometimes cold weather occurring at normal planting times. Because of likely deterioration in plant yields, growers increased planted area to compensate for the expected reduction in production.

US Beet Sugar Per Acre, Crop Year (September/August), 2006/07-2011/12


Estimated Relationship Between Crop Year (September/August) Sugar Production and the Proportion Produced in September

Figure 3 shows relationships between area planted and the previous year’s sugarbeet price on a national level for two periods: 1981/82-2007/08 and 1981/82-2010/11. Because sugarbeets are grown in a variety of differing regions, the aggregate relationship in the first period is not strong (low R-squared), but there is a statistically significant relationship between area and previous year’s sugarbeet price (t-statistic = 2.12). Adding the last few seasons to the observation set nullifies any statistically sound relationship over the entire period (R-squared less than 1 percent and no statistical significance for the lagged price coefficient).

Figure 4 shows area intended for planting and the realized sugarbeet yield from the previous year. The step-increase in sugarbeet yields that began in 2006/07 was accompanied by a marked decrease in area intended for planting. The trade-off was relatively weak for the first 2007/08 season but was well established in the next and succeeding seasons. One conclusion would be that sizeable production would not need as much area because of the jump increase in yields.

Another factor is that the lower area period (2008/09 forward) corresponds to the period when the provisions of 2008 Farm Act have been in force. One of the most notable features of this Act was the elimination of the suspension criterion for marketing allotments. An interesting hypothesis is that with marketing ceilings placed on beet processing firms based on sales from an earlier period, inter-firm competition became less of a factor in the market. The 2008 Farm Act was intended to provide competition corresponding to at least 46.2 percent of the domestic sugar market (minimum marketing allotment for U.S. producers of 0.85 of expected consumption times the legislatively set 0.5435 proportion assigned to beet processors). The average share since 2008/09 has been only 41.5 percent. This percentage contrasts markedly with the 46.8 percent share for the 2002/03-2007/08 period covered by the 2002 Farm Act.

Other U.S. Sugar Supply

There were no WASDE changes for FY 2012 cane sugar production. Florida cane sugar processors remain optimistic regarding the harvest. February production in Texas was only 4,679 STRV, far below average. To meet the USDA forecast of 145,000 STRV, production will have to continue into April. Oddly enough, the sole Texas processor increased its forecast of season-long production in the Sweetener Market Data from 145,624 STRV last month to 163,058 STRV this month.

The USDA reduced its forecast of sugar imports from Mexico by 385,000 STRV to 730,000 STRV. As detailed below, Mexican exportable supply is lower due to lower than expected production and increased domestic demand. There have been no announcements of new sugar imports under a tariff-rate quota that would allow Mexico to meet consumption needs without a reduction in exports or ending stocks.

October-March imports from Mexico are estimated by the Foreign Agricultural Service (FAS) at 524,000 STRV. This estimate implies that only 206,000 STRV will enter in the next 6 months of the fiscal year, which averages out to only 34,333 STRV per month.

The USDA increased its projection of high-tier tariff sugar imports by 5,000 STRV to 10,000 STRV. The change was made on the basis of pace to date.

Use and Ending Stocks

Exports continue to be forecast at 250,000 STRV. Deliveries made in February were in line with expectations; therefore, no changes were made in the WASDE.

Ending stocks, forecast as the difference between projected total supply and total use, are projected at 798,000 STRV. This level implies an ending stocks-to-use ratio of 6.8 percent, down from the 9.0 percent projected last month.

Relationship Between US Sugarbeet Area and Previous Year Sugarbeet Price, Crop Years 1981/82-2007/08 and 1981/82-2010/11


US Sugarbeets: Prospective Plantings, Sugarbeet Yields, and US Sugar Program Covered by 2002 Farm Act and 2008 Farm Act

Mexico Sugar and High Fructose Corn Syrup

The USDA lowered its forecast of 2011/12 Mexico sugar production by 100,000 metric tons (mt) to 4.900 million mt. The two-stage USDA methodology is set out in table 1. The first stage is based on production parameters (sugarcane yield and sucrose recovery) calculated from historical data of already-completed harvests. For each parameter, a ratio is calculated of a within-season interim value to the end-of-season final value, and an average ratio value spanning several years is estimated. In the second stage, these interim-to-final parameter ratios are applied to interim 2011/12 production data to forecast final 2011/12 production parameter values from which sugarcane and sugar production are calculated.

The starting point is the 2011/12 area harvest estimate from Comite Nacional Para El Desarrollo Sustentable de la Cana de Azucar (CNDSCA) of 706,185 hectares. Based on factory surveys, the CNDSCA estimates that through April7, 2012, 35,879,800 mt of sugarcane and 3,876,966 mt of sugar has been produced from 536,716 hectares harvested. The interim sugarcane yield is 66.85 mt per hectare and sucrose recovery is 10.81 percent. Based on the ratios shown in the table, a final-point estimate of sugarcane yield is 63.42 mt per hectare and sucrose recovery is 10.91 percent. Implied 2011/12 sugar production is rounded up to 4.9 million for the WASDE.

Table 2 compares the USDA estimate with the CNDSCA first (January revision) estimate and the second production estimate just released. Unlike in the USDA procedure, CNDSCA estimates are based on factory surveys conducted during the harvest. CNDSCA lowered its estimate of area harvested from the first estimate by 10,705 hectares to 706,185 hectares but increased expected sugarcane yield as a partial offset. In the second estimate, sugar production is projected at 5,036,215 mt, about 3.1 percent higher than the USDA forecast but only about 1.2 percent lower than its first estimate. In comparison with the USDA forecasts, the CNDSCA projects a higher sugarcane yield of 64.93 mt, higher sucrose recovery of 10.98, and a higher sugar yield of 7.13 mt per hectare.

In a stochastic version of the USDA production model, estimated production has a standard deviation of 95,505, implying that the CNDSCA forecast is 1.582 standard deviations away from the USDA estimate. Statistically speaking, the CNDSCA is technically within the confidence bounds of the USDA estimate, but so is production at a lower level of 4.800 million mt or less.

Sugar and Sweetener Consumption

Forecasting sugar and sweetener consumption in Mexico is a challenging task. Using data from the CNDSCA, per capita sweetener consumption in 2010/11 fell 4.3 percent from the previous year to 49.11 kilograms. The percentage drop was the greatest since 1982/83 and per capita sweetener was at its lowest level since 2002/03. Although real per capita Gross Domestic Product (GDP) had fallen about 9 percent in 2008/09, it had grown by 3 percent in 2009/10 and 4.3 percent in 2010/11. Real sugar prices were high in 2010/11—401.9 real 2005 pesos per 50-kilogram bag in Mexico City—but lower than the average 429.6 real 2005 pesos in the preceding year. (High sugar prices have likely been more influential in the shift toward greater use of high fructose corn syrup (HFCS) in beverage and food processing uses.) A further complication has been reports of undocumented sugar entering from Guatemala and Honduras. Press reports have quoted entries of 40,000 mt for the year, but José Orive, Executive Director of Sugar Producers of the Central American Isthmus (AICA), speaking before the USDA Outlook Conference in February 2012, estimated the undocumented inflow at between 80,000-120,000 mt. These inflows (if they did occur) would likely offset consumption from recorded sources (domestic production and legal imports).

The rationale for undocumented sugar entries into Mexico would be Mexican sugar prices that are higher than those in neighboring countries, especially where evasion of border security is possible. Figure 5 shows wholesale sugar prices in the Mexican State of Chiapas and in Guatemala City for the period since January 2008 (date of implementation of the sugar provisions of the North American Free Trade Agreement, or NAFTA). Mexican prices were mostly lower than corresponding Guatemalan prices up to May 2009. Correlation between the two price series does not become evident until early 2010. For the remainder of 2010 and 2011, movements in the series track each other, with Guatemalan prices remaining below Mexican prices. Mexican prices began to decline in October 2011 and by January 2012 were below the Guatemalan price. Sugar trade sourcing from Guatemala would seemingly be less advantageous in this pricing environment.

Figure 5 shows sweetener consumption for October-February for the last 3 years as reported by CNDSCA. Combined sugar and HFCS consumption is running ahead of last year by 5.4 percent and ahead of 2009/10 by 2.9 percent. HFCS is up 8.8 percent relative to last year and sugar is up 4.1 percent. Figure 6 shows monthly cumulative sweetener ratios for 2010/11 and 2011/12 relative to the corresponding monthly totals in 2009/10. January and February ratios show steady cumulative sweetener consumption growth of about 2.9 percent relative to corresponding monthly totals in 2009/10. If this trend were to continue for the next 7 months, aggregate sweetener consumption would be close to 5.940 million mt.

Another approach to forecasting Mexican sweetener consumption is based on the relationship of sweetener consumption, prices, and real income. Table 3 shows an estimated relationship between per capita sweetener consumption and real per capita GDP from 1996/97 through 2010/11. Attempts to include statistically significant real sugar prices were unsuccessful. The estimation indicates that per capita sweetener consumption varies in a significant systematic way with real per capita GDP for current and 2-year lagged periods. (Figure 8 shows the estimated relationship graphically.) Two outlying periods not explained were 2005/06 and (as already discussed) 2010/11. Based on a 2011/12 forecast of per capita real GDP growth of 3.9 percent (used in USDA long-term projections released at the February 2012 Outlook Conference), Mexican per capita sweetener consumption is estimated at 51.49 kilograms per capita. Assuming a resident population of 114.975 million, total sweetener consumption is forecast at 5.920 million mt. (This amount is close to the 5.938 million mt from the analysis which assumes a 2.9 percent total sweetener growth over the 2009/10 level.)

CNDSCA sweetener data indicates that 2010/11 HFCS consumption was 1.635 million mt, dry weight. The USDA had adopted this amount as its forecast for 2011/12. Recent sources have indicated that HFCS use in Mexico is likely to expand above this level. As already discussed, HFCS consumption is already 8.8 percent more than last year’s consumption through 5 months of the marketing year. The USDA now projects HFCS consumption to grow at 5 percent for the entire year. This rounds to 1.720 million mt, dry weight. The forecast for sugar is calculated as the difference between total sweetener consumption (5.920 million) and the HFCS amount, or 4.200 million mt. Deriving this same result from the per capita sweetener model discussed above produces a standard deviation of 122,072 mt.

Implications for Imports, Ending Stocks, and Exports

The practice adopted by the Interagency Commodity Estimations Committee (ICEC) for sugar is not to forecast imports from a TRQ until that TRQ is officially announced. Although publically discussed, it is not certain that the 250,000 mt TRQ most usually mentioned will actually be established. Until a definite pattern can be discerned with respect to sugar exports, the ICEC assumes that ending sugar stocks will be maintained at a level to assure sufficient supplies until the start of the next year’s harvest. Historically, this has been interpreted as 22 percent of human consumption at the end of September. With the application of these two restrictions (imports and ending stocks), exports become the residual that balances total use with total supply.

The change in total supply is a negative 100,000 mt. Consumption increases by 188,000 mt, along with stocks of 41,000 mt (22 percent of the consumption increase), for a total of 229,000 mt. Exports, therefore, have to decrease by 329,000 mt to match the total supply decrease of 100,000 mt. The new export forecast is 635,000 mt.

Wholesale Sugar Prices in Guatemala City and Chiapas


Cumulative Sweetener Consumption in Mexico, October Through February, 2009/10 -- 2011/12


Monthly Cumulative Sweetener Consumption Ratios for 2010/11 and 2011/12 Relative to Corresponding Months in 2009/10


Per Capita Sweetener Consumption in Mexico: Actual and Fitted Values from Correlation with Real Per Capita Gross Domestic Product

Honey

The U.S. honey crop was expected to be down in 2011 due to drought conditions in the South and heavy rainfall in many northern States. Spring honey flows on the West Coast and parts of the intermountain area were hampered by excessive rainy, cool weather. Dry and hot weather in the Southeast and Southwest reduced the spring honey crop for many beekeepers. As a result, domestic honey production dropped 16 percent in 2011 from 2010 as the number of bee colonies fell 7.5 percent and yield per colony declined 9 percent. The States that had the biggest production setbacks—at least 2000 pounds—were North Dakota, California, Florida, Texas, and Minnesota. In total, the crop reduction was 28.1 million pounds of honey, despite record-high average prices received by honey producers in both 2010 and 2011.

Although honey prices received by domestic producers were 7 percent higher on average in 2011 than in 2010, prices received by foreign honey exporters were even higher, by 16 percent. Even with the gain in domestic prices, honey producers in North Dakota and California experienced steep falls in value of production--$15.4 and $14 million, respectively, in 2011. Producers in Florida, Minnesota, and Texas saw their production values drop by around $3 million each from 2010. Overall, the value of U.S. honey production declined by $29.2 million in 2011.

Despite the smaller U.S. honey harvest in 2011, imports and beginning stocks were higher, which raised total honey supply by 3.6 percent to 482 million pounds. After subtracting lower ending stocks and 25 percent higher exports from total supply, domestic use equaled a record 433 million pounds, which translates to 1.4 pounds per capita in 2011. Given the higher honey prices in 2011, the domestic use estimated value is $2.04 per capita at the wholesale level, which is 15 percent higher than $1.78 per capita in 2010.

The import share of domestic consumption of natural honey reached a record high of 66.6 percent in 2011, which was 2.6 percent higher than the previous import share record of 64.9 percent in 2006. The volume and value of U.S. honey imports were both at record levels even as import unit values continued to climb, averaging $1.35 per pound in 2011. Honey imports totaled 288.3 million pounds in 2011, twice the amount imported a decade ago in 2001. The value of these imports was $388 million, more than 5 times the $71.6 million value in 2001.

The top foreign suppliers of natural honey to the United States in 2011 were Argentina at 73.9 million pounds, followed by Vietnam at 61.3 million pounds and India with 59.3 million pounds. These three suppliers account for two-thirds of total U.S. imported honey. In 2011, honey shipments from Uruguay and Brazil jumped significantly, by 731 percent and 49 percent, respectively. Although the U.S. honey crop was smaller in 2011, exports climbed to 12 million pounds, valued at $18.7 million. Israel is the biggest buyer of U.S.-produced honey. Export unit values for U.S. honey averaged $1.56 per pound in 2011, which kept the terms of trade (i.e., export unit value/import unit value) at 1.2, much lower than the recent high of 2 in 2007.

As US Honey Production Plunged, Imports Jumped Sharply in 2011

U.S.-Mexico High Fructose Corn Syrup Trade: Divergent Estimates and Implications

This article examines divergence in estimates of consumption of U.S.-produced high fructose corn syrup (HFCS) in Mexico. Estimates made in Mexico imply that HFCS consumption is greater than that implied by official U.S. export estimates compiled by the U.S. Census Bureau. The issue is important because HFCS displaces sugar consumption in Mexico and makes sugar available for export to the United States. Along with estimation of U.S. sugar production, measurement of Mexican exportable surplus is a very important factor in considering increases in the U.S. sugar tariff-rate quota to assure adequate supplies of sugar to the U.S. market. There are implications as well for estimating the size of U.S. HFCS production and the demand that the U.S. wet milling sector has for U.S.- produced corn.

Divergence in Estimating U.S. HFCS Use in Mexico

The Food, Conservation, and Energy Act of 2008 (2008 Farm Act) requires the Secretary of Agriculture to collect publically available information on Mexican production, consumption, and trade of HFCS. Each month in the World Agricultural Supply and Demand Estimates (WASDE), the U.S. Department of Agriculture (USDA) publishes estimates of U.S. HFCS exports to Mexico from the U.S. Census Bureau for the fiscal years (FY) covered in the WASDE. These export estimates are meant to signal the level of HFCS consumption in Mexico.

In the March 2012 WASDE, U.S. HFCS exports to Mexico for October-December 2011 (the first 3 months of FY 2012) were reported at 233,991 metric tons (mt). Compared with the corresponding period in FY 2011, this represents a drop of 26.7 percent in estimated exports. Given that Mexico imports almost all its HFCS for consumption from the United States and that its domestic production is capped at about 40,000 mt per month, the decline in reported exports could be interpreted as a sign of a decline in HFCS consumption for the entire year. With less HFCS substituting for sugar in Mexico, the implication is that there may be less sugar in Mexico for export to the United States.

An advantage of the export data from the U.S. Census Bureau is that it is easily available from the Foreign Agricultural Service (http://www.fas.usda.gov/gats/default.aspx), the U.S. International Trade Commission (http://dataweb.usitc.gov/scripts/user_set.asp), and other assessable sites. Less well known is data availability about HFCS consumption and trade in Mexico. The Comite Nacional Para El Desarrollo Sustentable de la Cana de Azucar (CNDSCA) publishes monthly sugar and HFCS supply and use figures at its Spanish-language internet site based on data sourced in Mexico (http://www.cndsca.gob.mx/). Trade data from the Secretariat of the Economy (Economia) is available but usually is only convenient for use by paid subscribers of reporting services such as the Global Trade Atlas from the Global Trade Information Services, Inc. (http://www.gtis.com/gta/).

Table A-1 shows a comparison of HFCS imports from the United States reported by Economia with U.S. HFCS exports to Mexico reported by the U.S. Census Bureau. Fiscal year totals are shown in figure A-1. In 14 of the 16 fiscal years, Economia imports exceed U.S. Census Bureau exports. For the entire 16-year period, Economia imports exceed exports by about 16 percent. In the early period of the North American Free Trade Agreement (NAFTA), reported annual imports exceeded reported exports by between 19 and 135 percent, but the annual totals were relatively low—below 300,000 mt, dry weight.

Two years after the full implementation of the NAFTA sweetener provisions in 2008, imports of U.S. HFCS in Mexico became sizeable—more than 900,000 mt in each year. Reported imports were 4.4 percent greater than reported exports in FY 2010 and 14.1 percent greater in FY 2011. Figure A-2 shows monthly trade for 2010 and 2011. Average monthly reported imports exceed reported exports by 6,073 mt in 2010 and by a more sizable 20,007 mt in 2011. If the average difference for 2011 were to extend through the 9 remaining months of FY 2012, the projection of FY 2012 HFCS consumption in Mexico would be 1.345 million mt instead of the March 2012 projection of 1.635 million. The difference of 290,000 mt would imply a corresponding decrease in the projection of exportable surplus.

US High Fructose Corn Syrup in Mexico: Fiscal Year US Census Bureau Exports and Economia Imports of HFCS from the United States


US High Fructose Corn Syrup in Mexico: Monthly US Census Bureau exports and Economia Imports of HFCS from the United States, 2011-12


Sweetener Consumption in Mexico, CNDSCA and Alternative Implied by use of US Census HFCS Exports to Mexico

Figure A-3 shows alternative estimates of sweetener consumption in Mexico using both sets of HFCS trade data. The first estimate comes from the CNDSCA and second set is obtained by substituting U.S. Census export estimates for Economia’s estimates of HFCS imports from the United States. Differences in implied per capita sweetener consumption are not great for 2008/09 or 2009/10, but the 144,412 mt difference in 2010/11 implies a per capita estimate of 47.84 kilograms—a difference of 1.27 kilograms, that is, 2.6 percent less than the official CNDSCA estimate. While the year-over-year decrease in per capita consumption is already a large 4.3 percent using the CNDSCA data, the decrease using the U.S. export data is 6.1 percent.

Implications for Estimating U.S. HFCS Production

There are no direct estimates of HFCS production available to the USDA. Agricultural economists in ERS make estimates of HFCS deliveries, and these are supplemented by U.S. Census Bureau estimates of HFCS exports and imports. Production is residually estimated as the sum of deliveries plus exports (to Mexico and all other countries), less imports.

Domestic HFCS consumption has been declining on a per capita basis since 1999 due to reduced consumption of soft drink carbonates. As seen in figure A-4, the trend accelerated in 2007 as total deliveries began to decrease on average by more than 275,000 tons per year. By 2011, deliveries were at only 81.7 percent of their level of 2002. As a partial offset, HFCS exports began to increase in 2005, but it was not until 2010 that export growth exceeded the decline in deliveries. HFCS production increased for the first time since 2006. However, the data indicate that the growth spurt was short-lived, with exports flattening in 2011 while domestic deliveries declined by 242,000 tons.

The flattening in exports runs counter to Mexican sweetener data that shows large declines in Mexican sugar consumption as HFCS gains consumer market share. Table A-2 shows the implications of using Economia’s import estimates (bottom panel) instead of the U.S. Census Bureau’s export estimates to Mexico (top panel). Because most HFCS trade to Mexico consists of HFCS 55, the production estimates of HFCS 55 are the most affected.

Figure A-5 shows a comparison of total of HFCS production estimates for the last 5 years. Not surprisingly, the estimates are close for the pre-2010 years when exports to Mexico were not nearly as large as they became in 2010 and 2011. HFCS production in 2010, using the import data, is estimated at 9.173 million tons, dry basis – about 1 percent higher than the standard measure. HFCS production in the next year using the import data is estimated at 9.163 million tons – about 3 percent higher than the standard measure. The alternative estimation implies that for two years in a row, exports have offset domestic delivery declines and arrested—at least temporarily—the downward production spiral. This result would seem to be in line with many in the HFCS industry that appear more optimistic about the future than they did a couple of years ago.

Conclusion

When the USDA analyzes sweetener consumption in Mexico, it usually uses data generated in Mexico by the CNDSCA, SAGARPA (Mexico’s Department of Agriculture), Economia, the Cámara Nacional de las Industrias Azucarera, the Unión Nacional de Cañeros, the Foreign Agricultural Service (FAS) office in the U.S. Embassy in Mexico City, press reports, and personal contacts. What has been discussed in this article is that the information gathered from these sources has been at odds with data from the U.S. Census Bureau, which has introduced more uncertainty into the projection process. Nonetheless, the USDA is likely to continue with its current methodology because it has proved consistent with projections made by other sweetener market observers.

An open question concerns USDA estimates of U.S. HFCS production. The present method of using trade data exclusively from the U.S. Census Bureau may be underestimating production. Until the trade data discrepancies have been resolved, perhaps production ranges should be reported. For USDA’s estimate of corn use, the variance of the production range amounts to about 16 million bushels. Although this is small relative to a crop of over 12 billion bushels, the overall corn use estimation process might be improved upon resolution of this issue.

US HFCS Production, Domestic Deliveries, and Exports, 1999-2011


Fiscal Year HFCS Production Implied by Alternative Method of Estimating Exports: US Census Exports and Exports Using Mexico Secretariat of Economy Imports of HFCS from the United States

U.S. Sugar Exports in the WASDE Revisited

As reported in the September 2011 Sugar and Sweetener Outlook, the Interagency Commodity Estimates Committee (ICEC) for sugar has been considering a change in the sourcing of U.S. sugar exports for the World Agricultural Supply and Demand Estimates (WASDE). The current series is based on exports reported by the Farm Service Agency (FSA) in its Sweetener Market Data (SMD) database. These data constitute the historical estimates reported in the WASDE and are the basis for the current and 1-year-ahead WASDE forecasts. The issue is whether to change reporting and forecasting from the SMD-base to a broader range of sugar exports reported by the U.S. Census Bureau in its Foreign Trade reporting system. Sugar exports made by entities beyond those required to report to the FSA would be captured and be more representative of actual sugar supply and use. Another advantage would be the capability to report on destinations of sugar exports (especially to Mexico), not currently possible with the SMDbased system.

The sugar ICEC examined and compared U.S. sugar export data reported by the U.S. Census Bureau; Mexican U.S. sugar import data reported by the Economia Secretariat, Government of Mexico; and Foreign Agricultural Service (FAS) data on U.S. sugar going to Mexico reported for export credit. As earlier reported, the problem was that the Census-based monthly export data to Mexico averaged nearly twice as much as the other-sourced data in 2010 and 2011. The sugar ICEC decided against making any export-sourcing change until the discrepancy could be resolved.

The FAS reported the problem to the U.S. Census Bureau. The Census Bureau investigated and on March 13, 2012, issued a letter with new, corrected export data. These data pertained specifically to exports of refined beet sugar to Mexico under the Harmonized Tariff Schedule (HTS) 170112. The top panel of table B-1 reports the original monthly HTS 170112 data for 2010 and 2011, revisions to the data, and the corrected series. Because the HTS 170112 exports are a subset of total refined exports to Mexico and to all countries, these series are shown in the two panels below the top panel.

Figure B-1 compares the old and corrected series. The refined sugar exports to Mexico were reduced 26.6 percent to 184,095 metric tons for 2010 and 44.6 percent to 147,109 metric tons for 2011. Correspondingly, total refined sugar exports were reduced 23.8 percent to 213,637 metric tons for 2010 and 37.4 percent to 198,137 metric tons for 2011.

Table B-2 shows a comparison of U.S. sugar exports (in raw value) from the sources: U.S. Census Bureau for the corrected series; destination country reports for sugar imports from the United States, including Mexico’s Economia; FAS for sugar reported for Export Credit; and SMD for sugar sales for export. Although the totals do not match exactly, they are close to each other. Exact matches would not be expected due to differences in reporting methodologies and timing differences. Also, SMD records only exports by processors and refiners that report data to the USDA. Export credits are issued only to those entities that participate in the U.S. Refined Sugar Re-Export Program.

US Census Bureau Corrections to US Sugar Exports to Mexico and World for 2010 and 2011

April 2012

Published by USDA Economic Research Service

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