- Rainy weather in the spring and fall of 2019 has limited quantities of beet and cane sugar. Although the U.S. Agriculture Department has taken steps to help guarantee supplies, Food Business News reported producers and buyers expect continuing tight supplies until new crops come this fall.
- Major U.S. sugar suppliers have already signaled they won't be able to deliver the usual amounts of the commodity, the publication said. United Sugars expects 18% fewer deliveries than usual, and Western Sugar Cooperative projected 20% fewer deliveries.
- Meanwhile, last year's prices for beet sugar and refined cane sugar have gone from about 35 cents and 37 cents per pound, respectively, to 44 cents per pound today for either type, Food Business News reported.
The USDA and the U.S. Department of Commerce anticipated this supply problem last year and eased import restrictions on refined Mexican sugar in November. That move resulted in an additional 200 million pounds, but even that may not be enough as the USDA expects a 1.1 billion pound sugar deficit this year.
While the federal government can take further steps — such as tapping stockpiles or increasing imports from India — to ensure an adequate supply, there isn't much it can do in the short term about problematic weather.
But even if the weather turns out to be more conducive to better sugar harvests this year and next, food and beverage manufacturers still face the growing consumer trend away from conventional sugar and toward alternative sweetening solutions. This sugar shortage could push that trend to grow even more in 2020.
Americans have been worried for a long time about the amount of sugar they consume, and that concern is reflected in what they choose to eat and drink. As consumers turn away from high fructose corn sweeteners and soft drinks, the use of refined sugar also is falling.
For those continuing to use refined or beet sugar in their products, the higher prices are likely to stick around, especially if supplies remain low. This could prompt even more food and beverage makers to reformulate with alternatives sourced from stevia or monk fruit — or potentially explore plant-based sugar reduction ingredients such as soluble corn fiber or cacao fruit pulp.
The supply crunch could present an opportunity for producers of sugar alternatives to forge ahead with marketing campaigns to convince manufacturers there are other ways to sweeten their products without relying on sugar. It wouldn't be the first time something like this has occurred. When the shell egg supply dropped following the avian flu outbreak, companies stepped up with plant-based egg replacement ingredients.
If companies can offer alternative sweetener ingredients at the same or lower price as cane or beet sugar and still provide the same functional qualities, food and beverage makers might take a closer look than they have in the past.