Sugar Prices: A Sweet Deal for Growers, But a Sour Deal for Consumers

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The chart above displays refined sugar prices (cents per pound) using annual data from the USDA for a) U.S. wholesale refined beet sugar price at Midwest markets and b) the world refined sugar price. Due to trade restrictions on imported sugar coming into the U.S. at the world price, the U.S. sugar beet producers have a sweet deal, assisted by their government enablers, who protect them from more efficient foreign sugar growers who can produce cane sugar in Central America, Africa and the Caribbean at half the cost of beet sugar in Minnesota and Michigan. Of course, there's no free lunch, and this sweet trade protection comes at the expense of American consumers and U.S. sugar-using businesses, who pay twice the world price of sugar on average (26.6 cents for domestic sugar from beets vs. 13.1 cents for sugar from cane, see chart).

The cost of most trade protection is largely invisible, but the cost of sugar protection is directly visible and measurable, since the USDA and the futures markets regularly report prices for both domestic sugar and world sugar.