Sugarcane and Sugar Beets

Background and Development

The story of the sugar industry in the United States is in fact the story of two industries: one devoted to producing sugarcane and the other to producing sugar beets. Before the twentieth century, sugarcane accounted for 95 percent of world consumption of sugar. However, modern planting and refining techniques helped make sugar beet production profitable. By the 1980s, sugar beets and sugarcane shared equally in the U.S. sugar market. By 2008, sugar beet production in the United States was valued at almost $1.3 billion and sugarcane production at $814.4 million.

Sugarcane was introduced to the United States from the Caribbean region by Jesuit priests traveling to Louisiana in 1751, and the first U.S. sugar refinery was built in the same state in 1795. Sugarcane is produced only in Florida, Hawaii, Louisiana, and Texas. Western pioneers desiring their own source of sugar began sugar beet production in the United States around 1870, but their efforts proved unprofitable until the development of irrigation systems in the 1890s. Beet production provided 25 percent of the nation's sugar needs by 1920.

Sugarcane and sugar beets are grown mainly to produce table sugar and sucrose. Sugarcane is also produced to manufacture alcohol as fuel for vehicles. Although refining processes for sugar sources are similar, cultivation and harvesting techniques are quite different. Sugarcane is planted using stalk cuttings and matures at between 8 and 16 months, depending on the region. A crop of sugarcane may produce acceptable yields for two to three years before being replanted and, in Hawaii, where there is no danger of frost, can be harvested year round. Sugarcane is most often harvested mechanically, with specially designed harvesters that cut the stalk at the bottom, strip the unneeded leaves and top, and transfer the cane to a wagon. Prior to mechanical harvesting, sugarcane production required vast numbers of laborers who, in many cases, worked under conditions of slavery or near-slavery.

Grown primarily in 10 states, sugar beets, on the other hand, are harvested annually and have benefited greatly from the attention of agricultural specialists who devised seed types and planting methods that encourage maximum yields. Still, great care must be taken to ensure adequate distance between plants, weed control, planting depth, and proper fertilization. One study showed that 50 percent of sugar beet production costs were expended in cultivation. However, mechanical cultivation and harvesting equipment makes labor costs in sugar beet production negligible. Both sugar industries have attained yields that are among the highest in the world: the average yield for sugarcane was roughly 35 tons per acre in the late years of the first decade of the twenty-first century; yield hovered at around 25 tons per acre for sugar beets.

Sugar farmers, especially in Florida, faced environmental concerns throughout the 1990s. In 1991, the state was sued by the federal government to clean up the discharge from sugar farms as parts of Florida's Everglades were choked with cattails, a weed that grows from run-off from sugar fields. In 1999, the federal government revealed the Restudy, a major plan to clean up the Everglades.

Throughout the twentieth century, the U.S. sugar industry was bolstered by government programs designed to elevate the prices that sugar producers received for their product. Prices for sugar have traditionally gone through dramatic swings, and this trend continued into the early years of the first decade of the 2000s as the price per bushel of sugarcane jumped from $26.10 in 2000 to $29 in 2001.

In 1996, the U.S. government sought to alleviate farm subsidies and loans altogether. The 1996 Farm Bill called for the freezing and gradual reduction of agricultural loans and subsidies over a six-year period, resulting in termination of the program in 2002. Government assistance had been especially important to sugar producers because of the market's volatility. Though the bill met stiff resistance from sugar producers and lobbyists, it eventually passed, leading to some closures. In 2002, however, President Bush signed into law the 2002 Farm Bill, which extended farm subsidies for an additional six years. The 2008 Farm Bill continued the tradition of subsidies and also provided the first increase in loan rate for the sugar industry since 1985.

The sugar industry underwent a number of changes in the later part of the twentieth century. For example, per capita consumption of sugar (both beet and cane) plummeted from 102 pounds in 1970 to 60 pounds in 1980. By 2002 it had fallen to 45 pounds. By the late years of the first decade of the 2000s, the corn sweetener market claimed much of sugar's old market share. The steady drop in consumption led to a reduction in cane sugar refineries, from 22 in 1981 to 12 at the turn of the twenty-first century.

Falling domestic consumption cost the U.S. sugar industry approximately $250 billion in 2001 alone. Between 1999 and 2003, domestic sugar sales fell from 10.11 million short tons to 9.67 million short tons. As a result, production began to wane as well. Sugar beet acres planted fell from 1.42 million in 2001 to 1.36 million in 2002; acres harvested declined from 1.36 million to 1.33 million over the same time period. Similarly, sugarcane acres harvested fell from 1.02 million in 2001 to 995,000 to 2002.

Current Conditions

According to the U.S. Department of Agriculture (USDA), the United States produced 3.4 million tons of sugarcane from 873,900 harvested acres in 2009, up from 27.6 million tons and 868,000 acres the year before. About 94 percent of the sugarcane produced was used to make sugar and 6 percent was used for seed. Florida was the number-one producer of sugarcane, accounting for 13.9 million tons, followed closely by Louisiana with 13.7 million tons. Hawaii and Texas made up the remainder. Price per ton for the commodity was $29.50 in 2008.

Minnesota was the top grower of sugar beets, producing 10.6 million tons of the crop in 2009, or 36 percent of the nation's total of 29.5 million tons. Other top states for sugar beet production were Idaho (5.6 million tons), North Dakota (4.8 million tons), Michigan (3.3 million tons), and Nebraska (1.3 million tons). Other states that produced the crop commercially included Montana, Colorado, California, Wyoming, and Oregon. U.S. farmers harvested about 1.2 million acres of sugar beets in 2009, up slightly from 1.0 million acres in 2008. Sugar beets were priced at $48 per ton in 2008.

Industry Leaders

In the early 2010s, leading sugar farmers included the Hawaiian Commercial & Sugar Co. (HC&S) in Puunene, Maui, Hawaii, which operated the state's largest sugar mill. HC&S was a division of A&B Hawaii Inc., one of two subsidiaries of Alexander & Baldwin Inc. The firm had 900 employees and produced 200,000 tons of raw sugar annually. Also a leader in the industry was Sterling Sugars Inc. of Franklin, Louisiana. Sterling, a subsidiary of M.A. Patout & Son, produced 1.25 million tons of sugar cane annually and employed about 200 people. Annual sales for the company in the early years of the first decade of the 2000s were around $40 million. U.S. Sugar Corp. (Clewiston, Florida), with 1,500 employees, was another major player, producing 700,000 tons of sugar annually. Flo-Sun Inc. (West Palm Beach, Florida) was the number-one sugar producer in the United States at 4 million tons per year. Including all of the company's divisions, 2009 sales totaled $2.5 billion.

America and the World

Low world sugar prices threatened U.S. import protections at the turn of the twenty-first century. According to the USDA, imports from Mexico reached 260,000 tons in 2000, compared to 155,000 tons the previous year. Under NAFTA, Mexico was allowed to import roughly 280,000 tons of sugar, duty-free, to the United States in 2001.

In 2010, the U.S. government announced plans to import 150,000 metric tons of sugar--the first time since 2006--in order to stabilize prices, which had risen to record highs in January of that year. According to the USDA, the amount of sugar consumed in the United States could not be supported by domestic sources alone.