Food Manufacturers Pocket Savings, Pass None Along to Consumers

WASHINGTON - The price a farmer received for a pound of sugar in 2004 was 11 percent lower than it was the previous year, according to figures recently released by the U.S. Department of Agriculture.

Sugar prices fell to 23.5 cents per pound in 2004, down from 26.1 cents a pound in 2003.

Jack Roney, director of economic and policy analysis with the American Sugar Alliance, said it's ironic that this news comes on the heels of a major food manufacturer announcing a steep price hike for confectioner products in 2005.

"Time and time again, we see giant candy companies willing to raise consumer prices to offset increases in their business costs, which they typically and inaccurately attribute to sugar prices," Roney said. "But we never see candy companies lowering consumer prices to reflect the savings they see from slumping sugar prices. That's because they pocket lower farmer prices-there is no pass-through to grocery shoppers."

Roney pointed out that for years, major food manufacturers have lobbied Congress on the premise that consumers would benefit if America's sugar policy were eliminated and the market were flooded with cheap, subsidized foreign sugar.

"But their actions speak much louder than words," Roney added. "When farmers receive less for sugar, the last thing on a candy company's mind is consumer savings."

Since 1996, farmer prices for sugar have fallen by nearly 20 percent. Over that same period of time, prices for candy, cakes, and cookies have risen. Candy prices have jumped 12 percent, and cookies and cakes have been 18 percent more expensive. Ice cream prices have climbed by 23 percent.

The American Sugar Alliance is the national coalition of growers, processors, and refiners of sugarbeets and sugarcane, accounting for 146,000 American jobs in 19 states.

For more information about U.S. sugar policy, visit www.sugaralliance.org

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