Ohio candy mak­ers sour on U.S. sugar sup­port pro­gram

Dayton Daily News - - LOCAL & STATE - By Sab­rina Eaton

Ohio candy WASH­ING­TON — mak­ers want an ex­tra-spe­cial treat from Wash­ing­ton next year: the end of a fed­eral sugar price sup­port sys­tem that they say raises prices and drives jobs from the coun­try.

While farm­ers say the U.S. Depart­ment of Agri­cul­ture’s sugar price sup­ports en­sure the United States doesn’t de­pend on for­eign coun­tries for a key com­mod­ity, sweet-mak­ing com­pa­nies are sour on it.

At McJak Candy in Med­ina, com­pany pres­i­dent Larry Johns says the pro­gram puts his lol­lipops and fudge at a dis­ad­van­tage to prod­ucts made in coun­tries where sugar costs roughly half the U.S. price.

It’s the same story at Span­gler Candy in Bryan, which re­cently opened a candy cane plant in Mex­ico be­cause of its lower sugar prices. CEO Kirk Vashaw says 70 per­cent of a candy cane’s in­gre­di­ent cost is sugar.

“If we could just buy sugar at the price the rest of the world pays for sugar, we could move the 250 jobs we have in Mex­ico to Ohio,” says Vashaw, who still makes half his candy canes in Bryan. “This is ba­si­cally gov­ern­ment price fix­ing of the sugar mar­ket.”

Span­gler - best known for its Dum Dums lol­lipops - is the only com­pany that still makes candy canes in the United States, ac­cord­ing to Vashaw, who says his U.S. com­peti­tors all quit be­cause they couldn’t com­pete with candy canes made in coun­tries with cheaper sugar.

For more than 30 years, the fed­eral gov­ern­ment has guar­an­teed U.S. sugar beet and sugar cane pro­duc­ers a min­i­mum price for their prod­uct through a sys­tem of price sup­port loans, quo­tas and buy-backs.

The USDA sys­tem al­lots mar­ket shares to limit the amount of sugar each pro­ces­sor can sell and es­tab­lishes im­port quo­tas to con­trol the amount of sugar en­ter­ing the United States.

Phillip Hayes of the Amer­i­can Sugar Al­liance ar­gues the sugar pro­gram en­sures that a key com­mod­ity is still pro­duced in the United States.

He says it op­er­ates at no cost to tax­pay­ers be­cause it gives farm­ers loans that are re­paid with in­ter­est.

Be­cause sugar prices have re­mained rel­a­tively low while pro­duc­tion costs in­creased, he said U.S. sugar pro­duc­tion has de­creased in re­cent decades. The price man­u­fac­tur­ers pay for sugar is less now - 29.65 cents a pound at the end of 2016 - than the 38.29 cents a pound it cost in 1980, says Hayes.

“We tell law­mak­ers all the time it makes ab­so­lutely no sense for our coun­try to out­source our do­mes­tic sugar in­dus­try to Brazil be­cause we will be at the mercy of Brazil for pric­ing, if that hap­pens,” says Hayes.

Even though Ohio stopped grow­ing sugar beets years ago be­cause other crops are more lu­cra­tive, most of the state’s farm­ers back the sugar sup­ports, says Ohio Farmer’s Union trea­surer Roger Wise of Fre­mont.

Wise said the pro­gram is bud­get neu­tral, en­sures a steady sup­ply of sugar for con­sumers and ex­porters, and sta­bi­lizes prices.

“The pro­gram as­sures that we don’t have un­fair com­pe­ti­tion from for­eign coun­tries that are heav­ily sub­si­dized and dump sugar on the world mar­ket at be­low pro­duc­tion prices,” says Wise. “The fact of the mat­ter is that we need to have sta­ble sugar prices and sup­ply and that is what the pro­gram does.”

DAVID J. PHILLIP / AP

Candy mak­ers in Ohio would like to end a U.S. Agri­cul­ture Depart­ment sugar sup­port pro­gram that they say in­creases gro­cery costs for con­sumers.

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