USDA Sugar and Sweeteners Outlook
14 August 2012
USDA Sugar and Sweeteners Outlook - August 2012
USDA’s National Agricultural Statistics Service (NASS) forecasts a 2012/13 sugarbeet
crop of 35.336 million tons, which, if realized, would be a record. Most producing
regions in the United States have experienced excellent growing conditions through the
summer months after earlier than normal planting in the springNASS forecasts
sugarcane production for sugar and seed at 31.359 million tons, about 6.7 percent more
than last year. Forecast harvested area is forecast 2.1 percent higher at 891,000 acres and
yield is forecast 4.5 percent high at 35.2 tons per acre.
Due to the revisions made for fiscal year (FY) 2011 in the Sweetener Market Data, FY
2012 beginning stocks were lowered by 94,404 short tons, raw value (STRV) in the
August 2012 World Agricultural Supply and Demand Estimates. The only other change
was to reduce deliveries of re-export sugar to food manufacturers for sugar-containing
product export by 15,000 STRV, based on pace to date, to 165,000 STRV. The only
change for FY 2013 (apart from lower beginning stocks) was a reduction of sugar
imports from Mexico by 172,500 STRV to 1.159 million STRV.
No changes were made to 2011/12 Mexico supply and use. Based on expected lower
relative sugar prices relative to imported high fructose corn syrup (HFCS) from the
United States, 2012/13 sugar deliveries are increased by 123,000 metric tons (mt) and
HFCS deliveries are lowered by the same amount. These adjustments lead to reduced
sugar exports, now projected at 1.002 million metric tons (mt).
Sweeteners in the North American Free Trade Area
In the first week of August 2012, the US Department of Agriculture (USDA) released several reports concerning the supply and use of US sugar for fiscal years (FY) 2011, 2012, and 2013. On August 7, 2012, USDA’s Farm Service Agency (FSA) released revised Sweetener Market Data (SMD) for FY 2011. On August 10, 2012, USDA’s National Agricultural Statistics Service (NASS) published its first forecasts of sugar crop yields and production for 2012/13. On August 10, 2012, the USDA published in the World Agricultural Supply and Demand Estimates (WASDE) its latest supply and use estimates/projections for US and Mexican sugar.
Revised FY 2011 SMD
The revised SMD for FY 2011 corrected several important erroneous supply-and-use entries originally submitted by
US sugar refiners. The SMD increased refiners’ sugar imports by 12,072 short tons, raw value (STRV). Because
this sugar had been previously reported as imported by entities that do not report to the USDA, it had been counted
as direct consumption imports. Thus, this SMD correction reduced FY 2011 sugar deliveries by the same amount.
Also, according to SMD, the refiners had originally overestimated their level of sugar intra-sales less receipts by
11,946 STRV and understated refining losses by 34,044 STRV.
Refiners had originally misreported deliveries for human consumption and refined sugar stocks. The SMD
correction increased refiners’ deliveries by 65,900 STRV. This correction, along with that for direct consumption,
increased total deliveries for human consumption (sum of deliveries by beet and cane processors, refiners, and direct
consumption imports) by 53,827 STRV to 11,192,762 STRV for FY 2011. Based on refiners’ revised stock
submissions, their FY 2011 ending stocks of sugar were 723,610 STRV, a reduction of 94,405 STRV. Total endingyear
stocks are lower by 94,405 STRV as well—the revised estimate is 1.378 million STRV. The ending FY 2011
stocks level is the beginning stocks level for FY 2012.
Sugar Crop Production for 2012/13
NASS forecasts a 2012/13 sugarbeet crop of 35.336 million tons, which, if realized, would be a record. Most
producing regions have experienced excellent growing conditions through the summer months after earlier than
normal planting in the spring. Adequate irrigation in western producing areas and sufficient rainfall in the Midwest
(Michigan, Minnesota, and North Dakota) have boosted the potential for the record crop.
Although projected harvested area is about the same as last year, all major producing areas show improvements over
last year’s disappointing crop yields (fig. 1). The national yield is forecast at 29.07 tons per acre, more than 5 tons
per acre compared with last year. Of particular importance is the Red River Valley (Minnesota and North Dakota),
which accounts for more than 50 percent of the US sugarbeet crop. (Figure 2 shows regional sugarbeet production
forecasts compared with last year, and also makes the same comparison for sugarcane producing areas.) Yield is
forecast at 26.84 tons per acre, up from 19.49 tons per acre last year and likely to be a record. The forecast yield for
the Great Plains region (Colorado, Montana, Nebraska, and Wyoming) at 30.54 tons is 4 tons above last year and is
likely to be a record as well. Forecast yields in Michigan and the Pacific Northwest (Idaho and Oregon) are high
as well.


NASS forecasts sugarcane production for sugar and seed at 31.359 million tons, about 6.7 percent more than last
year. Forecast harvested area is forecast 2.1 percent higher at 891,000 acres and yield is forecast 4.5 percent high at
35.2 tons per acre.
Growing conditions in both Florida and Louisiana have been favorable in the spring and summer months so far this
year. In Florida, forecast harvested area is up by 10,000 acres to 410,000 acres and yield is forecast at only 0.3 tons
per acre less than last year at 37.7 tons per acre. Florida production is forecast at 15.457 million tons, 2.5 percent
higher than last year. In Louisiana, forecast harvested area is forecast up by 10,000 acres to 420,000 acres. Yield
growth in Louisiana is projected to rise 12.3 percent to 31.0 tons per acre, resulting in a crop of 13.020 million tons,
15 percent higher than last year.
US Sugar Supply and Use for FY 2012 and FY 2013
Due to the SMD revisions made for FY 2011, FY 2112 beginning stocks were lowered by 94,404 STRV in the
August 2012 WASDE. The only other change was to reduce deliveries of re-export sugar to food manufacturers for
sugar-containing product export by 15,000 STRV, based on pace to date, to 165,000 STRV. Although FY 2012 beet
sugar production is only 4.145 million STRV through June, an early mid-August start to the 2012/13 harvest could
make it possible for production to reach the 4.750 million STRV estimate in the WASDE. This situation would
resemble that of two years ago when the 2010/11 harvest started early and about 623,000 STRV of beet sugar was
produced in August and September. FY 2012 ending stocks are estimated at 1.729 million STRV. The ending
stocks-to-use ratio is estimated at 14.7 percent, 0.7 percentage points lower than last month.
The only change for FY 2013 (apart from lower beginning stocks) was a reduction of sugar imports from Mexico by
172,500 STRV to 1.159 million STRV. The increases in the sugar crop forecasts made by NASS were largely
anticipated by the Interagency Commodity Estimates Committee (ICEC) for sugar. Additionally, the growth
potential for beet sugar production in FY 2013 may be limited by processing capacity constraints in the Red River
Valley. Processor reports indicate that a significant portion of huge crop may not be harvested. FY 2013 ending
stocks are projected at 1.497 million STRV, implying an ending stocks-to-use ratio of 12.6 percent.1
1The FY 2013 sugar tariff-rate quota (TRQ) has not yet been announced by the Secretary of Agriculture. Until then, the USDA makes no
projection for additional specialty refined sugar, mainly organic sugar, above the minimum level to which the United States is committed
under World Trade Organization bindings. The additional specialty sugar TRQ amounted to 100,000 STRV in FY 2012.
Mexico Sugar and High Fructose Corn Syrup Supply and Use for FY 2012 and FY 2013
No changes were made to 2011/12 supply and use. Production is set at 5.048 million metric tons and there has been
no announcement of increased imports under tariff-rate quota authority. Sweetener deliveries are on track to meet or
exceed WASDE forecasts of 4.1 million mt for sugar and 1.72 million mt, dry weight, for high fructose corn syrup
(HFCS). The USDA has been predicting a recovery of 4.2 percent in sweetener (sugar and HFCS) deliveries above
last year’s low levels. As seen in figure 3, sweetener deliveries through June at 4.423 million mt are 5.0 percent
higher than the same time period last month. HFCS deliveries (the sum of domestic production plus imports less
exports) are 5.5 percent higher and sugar deliveries have recovered 4.9 percent relative to last year. Although
monthly sweetener deliveries can be volatile, only three more months remain with the trends well established.
Projections for 2012/13 are less certain. The USDA increased its projection of sugar deliveries by 123,000 mt from
4.077 million mt (less than the 2011/12 estimate of 4.1 million mt) to 4.2 million mt. Estandar sugar prices in
Mexico City in July averaged about 16 percent lower than their values at the beginning of the year. It is true that
world sugar prices have shown some strength through the summer (fig. 4) because of possible production shortfalls
in Brazil (wet conditions hindering the harvest and lowering total reducing-sugar levels) and in India (weak
monsoon). However, most observers expect strong surplus conditions to eventually prevail and for world sugar
prices to decline relative to current levels. Although the world price pass-through to Mexico is complex, there is
probably more room for further price declines within Mexico that would favor more domestic consumption. Because
the USDA retains its projection of overall sweetener deliveries at 50.62 kilograms per capita, any projected change
in sugar implies an exact offset in HFCS deliveries. Therefore, the projection of HFCS deliveries is reduced to 1.683
million mt, dry weight.
Implications from the drought-affected US corn crop could have additional impacts. Net corn costs of producing
US HFCS could increase as much as 38 percent from its June 2012 value to $345 per metric ton. Based on
historical relationships, the unit export value of HFCS to Mexico would be forecast to increase 8 percent to an
average of $452 per metric ton for 2012/13. Even if the 2012/13 Mexican price of estandar sugar were to assumed to
stay at about the same level as early August 2012, that price of $695 would still be about 18.5 percent higher than
the possible unit import value of HFCS 55 imported from the United States. Although this ratio is far below the
148-percent ratio average for 2010/11, it still may not be low enough to detract significantly from the trend of using
HFCS 55 in place of sugar as the sweetener of choice in Mexican-produced carbonated beverages. Even so, a
slowdown in HFCS use remains a real possibility.
The USDA assumes that ending sugar stocks in Mexico will equal 19.5 percent of sugar deliveries for human
consumption, or 819,000 mt. Exports are projected as the residual that balances supply and use. That value is 1.002
million mt. All but 10,000 mt is assumed to be exported to the United States.


Published by USDA Economic Research Service
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