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Published February 11, 2011, 11:36 AM

High sugar prices help US farmers pay off debt

NEW ORLEANS — A series of disasters in Australia’s sugarcane region and foul weather in Brazil, India and China have driven up world sugar prices, and many U.S. farmers are making enough to pay off loans and buy new equipment.

By: Janet McConnaughey, Associated Press

NEW ORLEANS — A series of disasters in Australia’s sugarcane region and foul weather in Brazil, India and China have driven up world sugar prices, and many U.S. farmers are making enough to pay off loans and buy new equipment.

But specialty candy lovers will have a less happy Valentine’s Day.

Jaye Cuccia, owner of Evans Creole Candy Factory Inc. in New Orleans’ French Quarter, said she raised prices in late November for the first time in about eight years, from $14.95 to $18.90 for a box of 10 pralines.

“I probably need to increase my prices again,” said Cuccia, who uses 200 to 400 pounds of sugar a week. A year ago, a 50-pound bag cost $15 to $17; now, she’s paying $30 to $35.

Small companies are most quickly affected by price increases, said Susan Smith, spokeswoman for the National Confectioners Association. “The small companies buy small amounts of sugar. And they buy that sugar frequently.”

Prices at Laurel Street Bakery haven’t gone up yet, “but it’s getting close,” said owner Hillary Woodbury, who runs a breakfast-and-lunch cafe and sells wholesale to other coffee shops and restaurants. “Especially since there’s all sorts of rumors that flour’s going to go through the roof also.”

Price increases for one ingredient won’t usually force her to boost hers, but two at a time is a different matter, she said.

The U.S. gets about half of its sugar from sugarcane and the rest from sugar beets. Department of Agriculture import quotas have kept the domestic raw sugar price higher than the world average — and relatively stable — for decades. The U.S. price has been about 20 to 22 cents per pound since the early 1980s, while worldwide, the price has swung from 6 to 21 cents a pound just in the past decade.

But last year, the New York price averaged 34 cents a pound, and it hit 40 cents last Wednesday, said Jack Roney, director of policy analysis and economics for the American Sugar Alliance, an industry group for cane and beet sugar.

That’s the highest price since October 1980, and Australia is still surveying damage from last week’s cyclone. The trade group Canegrowers of Australia estimates that six months of floods did $500 million in damage to sugarcane and the hurricane damage is likely to equal that.

Australia is usually one of the world’s top three sugar exporters. Disasters there and in other nations that produce sugar have helped U.S. farmers.

“We’ll be able to pay off our crop loan completely,” said Mike Robichaux, who farms about 2,800 acres in Franklin and Patterson, La. He said he’ll be paying off about 1½ years’ worth of debt, because he hadn’t been able to pay in full for two years.

Robichaux said he added one new and one used tractor for the harvest, bringing his fleet to about 20, and should be able to buy one or two more.

“We’re still running a few that we bought in the 1960s,” he said. “We’re desperately needing to upgrade our equipment.”

The higher price for sugar, he said, “is going to let us make a start on that.”

For a while, it looked as if Louisiana’s crop wouldn’t be so hot. Winter downpours followed by a dry spring reduced the harvest by 2 million tons.

Ted Broussard, who farms 3,250 acres along the Atchafalaya Basin, said last year was his worst ever in terms of tons of cane harvested per acre, but the sugar content was his best ever. And, with rising prices, he’s in good shape.

“The price of sugar is where it’s never been before,” he said. “We’re able to pay down a lot of debt and move forward.”

Louisiana and Florida together produce about 92 percent of the U.S. sugarcane. Florida plants a bit less sugar than Louisiana but usually harvests more because its farms are farther south. Its crop this year has been hurt by a December freeze that helped boost domestic prices more than 2 cents a pound, LSU AgCenter economist Mike Salassi said.

Florida’s harvest runs through March.

“We’re still waiting to see what happens with their yields,” Roney said.

A cold wave in India and drought in Brazil — which produces about 45 percent of total world exports — and in China have helped reduce the supply worldwide.

Also, farmers in the U.S. and elsewhere switched some land from sugarcane to corn and soybeans last year to profit from high grain prices. That helped push the world sugar price to 25 to 30 cents a pound, Salassi said.

“When you add 3 to 5 cents freight fare, even if USDA wanted to bring in more sugar to lower our domestic price, they couldn’t afford to do it because the world price is so high,” he said.

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