SUGAR

Baltimore Sun Sunday - - FROM PAGE ONE -

plant, one of the last ma­jor in­dus­trial op­er­a­tions on this largely gen­tri­fied part of the har­bor.

“We’re up to the chal­lenge,” said Tim Noud, the re­fin­ery man­ager. “Go­ing to the 12-and-2 sched­ule will help us meet our pro­duc­tion goals.”

Noud said the nor­mal Mon­day-throughFri­day work­day isn’t ex­pected to change, with three shifts of work­ers on the clock day and night, pro­cess­ing about 6.5 mil­lion pounds of raw cane sugar a day. But the ex­tra work­days ev­ery other weekend will add sub­stan­tially to pro­duc­tion this year.

For now, man­agers are re­ly­ing on vol­un­teers who want to sup­ple­ment their pay, which is a min­i­mum of $24 an hour be­fore over­time. The 12-and-2 sched­ule is typ­i­cal only dur­ing “bak­ing sea­son” from Septem­ber to De­cem­ber. This time, Domino might be ex­tend­ing the work­week for more than nine months.

Domino em­ploys about 485 peo­ple, and jobs for an­other 125 are gen­er­ated through re­lated truck­ing and ter­mi­nal op­er­a­tions.

The USDA econ­o­mists noted that a ter­ri­ble sit­u­a­tion for farm­ers will be both a boon and bur­den for the re­finer­ies.

“It’s un­usual to see re­finer­ies at 100 per­cent for a long pe­riod of time with­out prob­lems or equip­ment break­downs,” said Steve Ha­ley, a sugar economist for a USDA board that an­a­lyzes sup­ply and de­mand. “One could ar­gue it’s un­rea­son­able, and there are go­ing to be some sig­nif­i­cant prob­lems.”

While harsh weather and bad har­vests are not new, the level of dev­as­ta­tion last year was far more wide­spread than usual, and some econ­o­mists say it’s a pos­si­ble har­bin­ger of what’s to come as a re­sult of cli­mate change. The un­prece­dented sit­u­a­tion has gov­ern­ment and in­dus­try of­fi­cials work­ing with­out a recipe.

Wet and cold weather had the mostly un­heard-of ef­fect of harm­ing both sugar beet crops in north­ern states and sug­ar­cane crops in South­ern states. In Min­nesota, for ex­am­ple, an ex­tremely wet Oc­to­ber fol­lowed by a hard freeze in early Novem­ber meant sugar beet fields were too wet to har­vest be­fore the beets be­came frozen in the ground, ac­cord­ing to a Min­nesota Public Ra­dio re­port.

Sugar beets, grown across a broad swath of the up­per United States, from Michi­gan to Washington state, ac­count for more than half of U.S. re­fined sugar. Cane grows in Florida, Louisiana and Texas.

The re­sult was a 10-year low in pro­duc­tion, said Rob Jo­hans­son, the USDA’s chief economist, com­ing at a time when the na­tion’s sweet tooth has pushed de­mand far higher than a decade ago.

The sugar trade is gov­erned un­der a long-stand­ing USDA pro­gram aimed at pro­tect­ing U.S. sugar farm­ers. Un­der a sep­a­rate agree­ment signed in 2014, Mex­ico was given the first chance to fill short­ages in the U.S. sugar sup­ply.

It’s not yet known whether that coun­try can spare enough to com­pletely fill the gap, the USDA econ­o­mists said. If not, sup­ply could come from Brazil and other coun­tries.

The USDA asked the Com­merce Depart­ment to al­low the ex­tra sugar im­ports last fall — some raw sugar and some al­ready re­fined into the fa­mil­iar gran­u­lar prod­uct fa­mil­iar to con­sumers. There will be far more raw sugar among the ex­tra im­ports, which would be min­i­mally pro­cessed in Mex­ico be­fore be­ing fin­ished at U.S. re­finer­ies.

With the in­crease, an es­ti­mated 1.8 mil­lion tons will ar­rive at U.S. ports this year from Mex­ico, up from about 1 mil­lion tons. Im­ports from all sugar-pro­duc­ing coun­tries usu­ally to­tal 3 mil­lion to 4 mil­lion tons a year to sup­ple­ment about 9 mil­lion tons pro­duced do­mes­ti­cally.

If de­mand con­tin­ues to ex­ceed sup­ply on store shelves and in food man­u­fac­tur­ing plants, more sugar im­ports could be al­lowed, but they could carry higher tar­iffs, po­ten­tially push­ing up con­sumer prices, the agri­cul­ture of­fi­cials said.

“We’ll be keep­ing an eye on things,” Jo­hans­son said.

Domino al­ready is the na­tion’s largest mar­keter of re­fined sugar. Domino Food Inc. is owned by Florida-based ASR Group and pro­duces those bright yel­low pack­ages of sugar sold at the gro­cery store. It also sup­plies sugar to food mak­ers.

Domino op­er­ates two sugar cane re­finer­ies in ad­di­tion to the one in Lo­cust Point in Bal­ti­more, in­clud­ing in Yonkers, New York, and Chal­mette, Louisiana. Ex­tra sugar ship­ments are ex­pected at each plant.

On Tues­day in Bal­ti­more, work­ers were ready­ing equip­ment to un­load the lat­est ship — the Dai­wan Kalon, laden with raw sugar from Brazil. The sugar will drop down a chute from the ves­sel onto a con­veyor belt that runs from the dock to a shed, where it’s dumped into enor­mous piles that re­sem­ble the ones made of road salt that are stored around the re­gion. Some is more brown than white, but it all gives off a whiff of mo­lasses.

The sugar is scooped up by a front-loader into a hop­per, and from there it is moved through metal ducts into the plant for pro­cess­ing. That in­volves wash­ing and fil­ter­ing the sugar and re­fin­ing it into fine and ex­tra-fine gran­ules and other types of prod­ucts. The sugar is pack­aged into 2,000-pound bulk “totes” for candy and ice cream mak­ers and the like, or into re­tail bags, can­is­ters and pack­ets for re­tail­ers.

The plant ships out by both truck and rail.

If the added im­ports suc­cess­fully sub­sti­tute for the miss­ing do­mes­tic sup­ply, food mak­ers will go about pro­duc­ing not only sweets, but also bread, pasta and many other prod­ucts that con­tain sugar, said Rick Pasco, pres­i­dent of the Sweet­ener Users As­so­ci­a­tion, a Washington-based trade group whose mem­bers in­clude food and bev­er­age com­pa­nies that use sugar.

But Pasco said he’s wor­ried the plan is not flex­i­ble enough if some­thing hap­pens given the com­pli­cated trade rules.

Such un­cer­tainty can put a strain on busi­nesses, with smaller op­er­a­tions like a neigh­bor­hood bak­ery prob­a­bly more se­verely af­fected in the short term. But big man­u­fac­tur­ers also need to know that they can keep their pro­duc­tion lines go­ing, he said. Pasco said he’d like the USDA to start the process of al­low­ing more sugar, both raw and re­fined, from other coun­tries, rather than wait for short­ages to in­crease.

“We’re hop­ing the re­finer­ies like Domino can crank out as much sugar as they can,” Pasco said. “Ca­pac­ity is a real prob­lem. Can they de­liver? There was drought in Mex­ico. Can they sup­ply enough? There are a lot of mov­ing parts, and over­all, it’s not a great sit­u­a­tion.”

For now at least, the in­crease in im­ports will help sus­tain the in­dus­try, said Alessan­dro Re­bucci, an as­so­ciate pro­fes­sor at the Johns Hop­kins Carey School of Business. But the toll could be high for the work­ers and the equip­ment at the re­fin­ery, he said.

It’s pos­si­ble Domino and other re­finer­ies will be un­able to keep up even with over­time, which could mean they need to hire tem­po­rary work­ers, he said.

Any re­fin­ing holdups also could mean de­lays for com­mer­cial food mak­ers and po­ten­tially price in­creases for con­sumers, Re­bucci said.

Still, he didn’t ex­pect any com­pa­nies to add re­fin­ing ca­pac­ity be­cause there is nor­mally plenty of equip­ment at the ready. Sit­u­a­tions like this one lead­ing to ex­tra work are too un­pre­dictable.

He agreed with Pasco that the gov­ern­ment might have to con­sider in­creas­ing the amount of sugar that is fully re­fined and not in need of any more pro­cess­ing or pack­ag­ing be­fore head­ing to store shelves or food mak­ers. That could give re­fin­ers like Domino a break.

But the most im­por­tant thing gov­ern­ment ought to do is work with in­dus­try to de­velop an over­ar­ch­ing plan to re­spond to cli­mate change, Re­bucci said. Unusu­ally bad weather is go­ing to be­come far less un­usual, and that will be a grow­ing fac­tor for U.S. farms and con­sumers’ pock­et­books.

“That will be the main thing to pro­tect na­tional in­dus­tries,” he said. “The im­ports may be good news for Bal­ti­more in the short term, and we should be happy about that. But it won’t make a dif­fer­ence for the in­dus­try long term. What’s here to stay is cli­mate change. Both business and gov­ern­ment need to come up with so­lu­tions be­cause this will get worse and worse.”

JERRY JACK­SON/BAL­TI­MORE SUN PHOTOS

A front-end loader moves a scoop of raw sugar from a quickly grow­ing pile fed by a con­veyor belt as it is off­loaded from a ship at the Domino Sugar plant in Tide Point.

A crane lifts an 8000-pound scoop of raw sugar from the hold of the Dai­wan Kalon, which brought a ship­ment from Brazil.

A crane pre­pares to lift a scoop of raw sugar from the hold of the Dai­wan Kalon. The USDA asked the Com­merce Depart­ment to per­mit ex­tra sugar im­ports last fall.

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