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