Love, John M.

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Research Papers in Economics

Agricultural Outlook Forum 2003  Presented: Friday, February 21, 2003 
 
2003/04 U.S. SUGAR SUPPLY AND USE1 
 
John M. Love 
USDA World Agricultural Outlook Board 
 
The 2003/04 projection uses the baseline, published in USDA Agricultural Baseline Projections to 2012, 
updated with carry-in stocks from the February, 2003 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. 
$  Continuation of trends in consumption and factors of production. 
  --Total consumption returns to trend levels by 2004/05. 
  --Technology increases crop yields and sugar recovery rates. 
  --Alternative-crop prices gradually decline through fiscal year 2005; improve to 
2013. 
$  In Mexico, the tax on soft drinks that use high fructose corn syrup remains in place. 
 
Key results from the baseline, comparing 2003/04 with 2011/12: 
 
$  U.S. sugar-crop prices, relative to alternative crops, decline slowly, reducing area planted.  
Nominal sugar prices remain at or above sugar loan rates.  Marketing allotment restrictions result 
in blocked stocks averaging 761,000 short tons, raw value, annually after 2003/04. 
 
Key results from the 2003/04 projections: 
 
$  Total production for 2003/04, at 8.8 million short tons (raw value),  is 570,000 tons above 
2002/03, mainly due to sugarbeet area expansion and improved weather for Louisiana sugarcane. 
$  Comparisons for 2003/04 versus 2002/03 beginning stocks and use are not valid, because of 
extraordinary pre-allotment sales or transfers of sugar prior to October 1, 2002. 
  --However, ending stocks are comparable, due to compensating adjustments in 
deliveries and miscellaneous uses resulting in 2002/03 season-ending stocks at 1.42 
million tons.  Season-ending stocks for 2003/04 are projected at 1.79 million tons. 
 
Supply, demand, and policy factors to watch for 2003/04: 
 
$  Factors affecting sugar-crop production in 2003. 
  --Will pre-plant, pre-harvest conditions favor production of sugarbeets and 
sugarcane? 
$  Will Mexico have sugar to export to the United States? 
  --What level of NAFTA low-tier import access? 
  --Will high-tier shipments reach the 149,000 tons projected? 
                                                 
 
1Approved by the World Agricultural Outlook Board. $  How will USDA set and manage the Overall Allotment Quantity for 2003/04? 
 
       2003 USDA Agricultural Outlook Forum, Sweeteners Session 
                            February 21, 2003 
                   
                      U.S. Sugar Supply and Use 1/ 
====================================================================== 
                        :           :       2002/03      :  2003/04 
      Item              : 2001/02   :====================:============ 
                        :           : January   February : Projection 
====================================================================== 
                        :           1,000 short tons, raw value 
        : 
Beginning stocks 2/     :   2,180       1,276     1,276       1,416 
Production 2/3/         :   7,906       8,155     8,260       8,830 
  Beet sugar            :   3,914       4,215     4,300       4,550 
  Cane sugar 4/         :   3,992       3,940     3,960       4,280 
Imports 2/              :   1,526       1,605     1,605       1,720 
  TRQ 5/                :   1,149       1,245     1,245       1,261 
  Other program 6/      :     296         300       300         260 
  Other 7/              :      81          60        60         199 
   Total supply         :  11,612      11,036    11,141      11,966 
                        : 
Exports 2/8/            :     108         125       125         125 
Domestic deliveries 2/  :  10,084       9,800     9,800      10,050 
  Domestic food use     :   9,891       9,600     9,600       9,870 
  Other 9/              :     193         200       200         180 
Miscellaneous 10/       :     144        -200      -200           0 
     Use, total         :  10,336       9,725     9,725      10,175 
Ending stocks 2/        :   1,276       1,311     1,416       1,791                                     
: 
Stocks to use ratio     :    12.3        13.5      14.6        17.6 
====================================================================== 
1/ Fiscal years beginning Oct 1.  Includes Puerto Rico.  2/ Historical  
data are from FSA, "Sweetener Market Data" except imports from U.S.  
Customs Service.  3/ Projections for 2003/04 are based on the USDA  
Agricultural Baseline Projections to 2012, updated with beginning  
stocks from the February 2003 WASDE.  4/ Production by state for  
2002/03 (projected 2003/04): FL 2,150 (2,126); HI 275 (282);  
LA 1,360 (1,703); TX 175 (168); PR 0 (0).  5/ 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 2003/04 available TRQs assume shortfall of 65,000 tons.  
6/ Includes sugar under the re-export and polyhydric alcohol programs.  
7/ Includes high-tier and other.  8/ Mostly reexports. 9/ Transfer to  
sugar containing products for reexport, and for nonedible alcohol and  
feed.  10 For 2001/02, residual statistical discrepancies. 

2003/04 U.S. SUGAR SUPPLY AND USE

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