Grim Sugar Predictions?

If you're one of the many food manufacturers who found the cost of sugar to be painful last year, then the recent predictions on sugar futures by the Wall Street Journal won't be welcome news.

Last year sugar supplies in the U.S. dropped to an all-time low, a difficult situation given that the U.S. consumes more than 11 thousand metric tons of sugar annually.

The high demand--and low supply--led to the importation of sugar from foreign countries at very high tariff rates. These costs were filtered down to food manufacturers, who, along with their customers, absorbed the cost.

In America's current economic situation some consumers just weren't able to pay more for their favorite sugary treats, and many food manufacturing companies took a loss.

Now, companies and consumer alike are asking, "What if it happens again?"

A particularly difficult winter has delayed the planting of sugar beets in the midwest. With sugar beets providing the largest source of American table sugar and brown sugar, this could have quite an effect on the cost of these sugars come fall.

At the same time, record cold in Florida last December has damaged much of the state's sugar cane production, yet another source for America's sugar.

The shortage, if there will be one of serious proportions, will be most evident by the holidays; sugar beets are harvested in October, just in time for Halloween, Thanksgiving, and Christmas.

Fortunately many American suppliers have been scouting for different foreign partners in order to get the best prices. Strong harvests from other parts of the world brought foreign prices on sugar to more acceptable levels last year.

It's hoped that even if America's sugar yield is low, good harvests from abroad could curtail some of the upcoming costs. That, along with powerful lobbying to lower those tariffs, might offer food manufacturers and bakeries some sweet relief.