Love, John M.

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Research Papers in Economics

1Approved by the World Agricultural Outlook Board.
Agricultural Outlook Forum 2005 Presented: Friday, February 25, 2004
2005/06 U.S. SUGAR SUPPLY AND USE
1
John M. Love
USDA World Agricultural Outlook Board
The 2005/06 projections use the baseline, published in USDA Agricultural Baseline Projections to 2014,
updated with carry-in stocks from the February 2005 World Agricultural Supply And Demand Estimates.
Key assumptions behind the sugar baseline:
• Continuation of current U.S. sugar policy.
-- Loan program includes loan rates and non-recourse loans.
-- Tariff-rate quota imports stay under current system.
-- U.S. honors commitments under trade agreements.
-- Commodity Credit Corporation disposes of any forfeited sugar.
• Continued trends in factors of production.
-- Technology increases crop yields and sugar recovery rates.
-- Alternative-crop prices decline in fiscal year 2005/06; rise to 2013/14.
-- Planted area is reduced by a partial adjustment to blocked stocks.
• Consumption grows in line with population growth.  Growth in imported sugar-containing
products slows until 2010 and levels off at about 38,000 tons annually.
• In Mexico, the tax on soft drinks that use high fructose corn syrup remains in place.
Key results from the baseline, for the period 2005/06 to 2014/15:
• U.S. sugar-crop prices remain relatively flat, as marketing allotments govern supplies.  Despite
imports rising to 1.7 million tons by 2014/15, the Overall Allotment Quantity is not reduced and
thus allotments are not suspended.  Consumption grows at an annual rate of about 80,000 tons. 
Production increases about 0.5 percent annually, on average.
Key results from the 2005/06 projections:
• Beginning inventories for 2005/06 are reduced from what is in the published baseline (USDA
Agricultural Baseline Projections to 2014) to account mainly for reduced 2004/05 production due
to poor growing and harvesting conditions in Louisiana and hurricane damage in Florida.
• Total production for fiscal year 2005/06, at 8.8 million short tons (raw value),  is 671,000 tons
above 2004/05, as cane sugar production recovers from weather-reduced output of a year earlier.
• Ending inventories for 2005/06, at 1.8 million tons, are reduced from the published baseline by
391,000 tons.       2005 USDA Agricultural Outlook Forum, Sweeteners Session
                            February 25, 2005
                  
                      U.S. Sugar Supply and Use 1/
======================================================================
                        :           :       2004/05      :  2005/06
      Item              : 2003/04   :====================:============
                        :           : January   February : Projection
======================================================================
                        :           1,000 short tons, raw value
:
Beginning stocks        :   1,670       1,897     1,897       1,548
Production 2/           :   8,649       8,143     8,117       8,788
  Beet sugar            :   4,692       4,705     4,699       4,667
  Cane sugar 3/         :   3,957       3,438     3,418       4,121
Imports                 :   1,750       1,639     1,639       1,603
  TRQ 4/                :   1,226       1,229     1,229       1,224
  Other program 5/      :     464         350       350         300
  Other 6/              :      60          60        60          50
   Total supply         :  12,069      11,679    11,653      11,939
                        :
Exports                 :     288         200       200         150
Deliveries              :   9,862       9,905     9,905       9,946
  Food                  :   9,678       9,715     9,715       9,756
  Other 7/              :     184         190       190         190
Miscellaneous 8/        :      23           0         0           0
     Use, total         :  10,172      10,105    10,105      10,096
Ending stocks           :   1,897       1,574     1,548       1,843            
                        :
Stocks to use ratio     :    18.6        15.6      15.3        18.3
======================================================================
1/ Fiscal years beginning Oct 1.  Historical data are from FSA, 
"Sweetener Market Data" except imports (U.S. Customs Service, Census
Bureau).  2/ Projections for 2005/06 are based on the USDA  
Agricultural Baseline Projections to 2014, updated with beginning 
stocks from the February 2005 WASDE.  3/ Production by state for 
2004/05 (projected 2005/06): FL 1,689 (2,047); HI 259 (261); LA 1,290 
(1,643); TX 182 (170).  4/ Actual arrivals under the tariff rate quota 
(TRQ) with late entries, early entries, and TRQ overfills assigned to 
the fiscal year in which they actually arrived.  The 2005/06 available 
TRQs assume shortfall of 50,000 tons. 5/ Includes sugar under the 
re-export and polyhydric alcohol programs. 6/ Includes high-tier and 
other.  7/ Transfers to sugar-containing products for reexport, and 
for nonedible alcohol and feed.  8/ Residual statistical discrepancies.

2005/06 U.S. SUGAR SUPPLY AND USE

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