SUGAR AND SWEETENER OUTLOOK -- SUMMARY January 21, 2005 January 2005, ERS-SSS-242s Approved by the World Agricultural Outlook Board ----------------------------------------------------------------- This SUMMARY is published by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20036-5831. The complete report will be available electronically about 1 week following this summary release. ----------------------------------------------------------------- USDA Projects Steady Beet Sugar Production But Lower Cane Sugar Production The National Agricultural Statistics Service (NASS) estimates sugarbeet area planted for fiscal year (FY) 2005 at 1.346 million acres, down only slightly from the previous year. The national yield is forecast at 22.9 tons, up slightly from 22.7 tons in the previous year. Sugarbeet production is forecast at 29.932 million tons, down 778,000 tons, or 2.5 percent, from last year. The beet processors’ forecast for FY 2005 beet sugar production is 4.705 million short tons, raw value (STRV). Florida sugarcane and sugar production in FY 2005 has been affected by four hurricanes. NASS estimates sugarcane for sugar production at 13.621 million tons, the lowest total since FY 1997. Florida sugar processors project FY 2005 production at 1.693 million STRV. This projection is down 318,000 STRV, or 15.8 percent, from pre-hurricane projections (i.e., October 2004 World Agricultural Supply and Demand Estimates). Louisiana sugarcane and sugar production in FY 2005 has been adversely affected by heavy rainfall in June and very muddy harvest conditions. NASS lowered its sugarcane for sugar yield estimate to 24.0 tons per acre, the lowest since FY 1994. Reports to the U.S. Department of Agriculture (USDA) indicate that sugar production from October 1 to the end of the campaign was 1.182 million STRV. Added to this amount is expected production in September 2005. With the possibility of certain mill closures and subsequent milling of affected sugarcane in other mills, September 2005 production is expected to be higher than average at 108,000 STRV, implying total production of 1.290 million STRV. The cane sugar miller in Texas projects FY 2005 sugar production at 180,000 STRV, and Hawaiian cane sugar millers project FY 2005 sugar production at 274,000 STRV. The USDA projects total FY 2005 sugar tariff-rate quota (TRQ) imports at 1.229 million STRV, indicating an expected TRQ shortfall of 50,000 STRV. As of January 5, 2005, raw sugar FY 2005 TRQ imports have totaled 302,955 STRV, 24.6 percent of the total raw sugar TRQ. Refined sugar FY 2005 TRQ imports have totaled 19,425 STRV, about 41 percent of the total allocation. Other program sugar imports outside the sugar TRQ for FY 2005 are projected to total 350,000 STRV. Non-program imports for FY 2005 are projected at 60,000 STRV. Sugar in imported products has continued its growth and has displaced domestic sugar deliveries. Sugar in imported products grew 111,000 STRV from FY 2003 to FY 2004 for a growth rate of 11.6 percent. The USDA projects FY 2005 sugar deliveries for food and beverage use at 9.715 million STRV, for an estimated growth rate of 0.6 percent. Preliminary delivery data received from processors and refiners for the first 2 months of the fiscal year show 4.8 percent growth relative to the same time period last year. The USDA projects ending stocks at 1.574 million STRV, for an implied ending stocks-to-use ratio of 15.6 percent. On July 16, 2004, the USDA set the Overall Allotment Quantity (OAQ) for FY 2005 sugar marketing allotments at 8.100 million STRV. In accordance with the 2002 Farm Act, the USDA divided the OAQ between refined beet sugar at 54.35 percent of the overall quantity and raw cane sugar at 45.65 percent of the overall quantity. In its determination of the OAQ, the USDA emphasized its estimate of domestic sugar food and beverage needs less its estimate of available sugar supply. The Department emphasizes also that there are considerable market uncertainties surrounding the underlying estimates, particularly domestic food use, non-OAQ supplies that may be available from the sugar re-export program, and sugar sold in FY 2004 for delivery in FY 2005. As of the clearance date of this report, the USDA has not changed the OAQ.