If you are a fan of Halloween candy, you might want to start a savings stash now. That’s because sugar production is down, and it could make prices spike.
Overall inflation has already been high for more than a year, and standard sugar production is down to the second lowest level behind 2019-2020, according to the U.S. Department of Agriculture.
As of this May, U.S. raw cane sugar prices climbed to 42.56 cents a pound, the highest since January 2011, according to the U.S. Department of Agriculture. Sugar supply in the U.S. is expected to decline 2.3% in the next crop year, according to the USDA.
With these tight supplies comes increasing costs and production woes, said executives cited in a Wall Street Journal report. Some have pointed to a U.S. agriculture policy that requires 85% of sugar to be purchased from domestic processors as the main reason for the short supply.
“Sugar farmers and processors say that policy ensures ample supplies and protects farmers’ livelihoods,” the Wall Street Journal explained.
“They said that U.S. sugar producers compete against subsidized sugar offered by foreign competitors at artificially low rates.”
Indeed, the report said the American Sugar Alliance – an organization of sugar cane and sugar beet farmers and processors – believes the current policy isn’t to blame for rising prices and shortages. Instead, they argued that foreign governments subsidize sugar production in their countries, keeping prices artificially low and threatening U.S. farmers.
“It’s insulting that multibillion-dollar corporations are posting high profits while crying poor to Congress as they try to weaken the policy that supports American farmers like my family,” said Nate Hultgren, a fourth-generation Minnesota farmer and president of the American Sugarbeet Growers Association.
However, the National Confectioners Association is working to reform the current program in an effort to cut costs down, said association Director of Public Affairs & Communications Carly Schildhaus, according to Axios. She said American businesses are forced to operate at a disadvantage.
Spangler Candy in Bryan, Ohio, has seen supply chain disruptions due to supplier cutbacks, said the WSJ, citing Spangler President Kirk Vashaw. Last year, the company turned down Halloween candy orders.
“It is so much more expensive to manufacture candy in the United States, and sometimes we lose business because of it,” Vashaw said, echoing Schildhaus.
Some suppliers have decided to buy supplies early which is expected to keep prices high, according to Rabobank, as cited by the WSJ.
Atkinson Candy in Texas has also been struggling to find a sugar supplier that would allow the company to fulfill it’s remaining orders for the year. Nearly a dozen suppliers have already said they are out, company President Eric Atkinson revealed.
“We were down to the point where we were about to run out,” Atkinson said, per the WSJ. “We would’ve been going to Costco.”
Even outside the U.S., Mexico is dealing with record high sugar prices and supplies are tight around the world in part due to weather-related issues. A 2020 study also found that climate change was expected to result in a sugar production decline in Thailand.
“The intensity of the dry season that El Niño is set to influence this year could result in a 10%–15% reduction in sugarcane yield globally,” said Nidhi Jain, an associate specialist at The Smart Cube, a research firm, according to Axios.
So, how will this impact consumers once spooky season has arrived? Experts think the “treat” portion of “Trick or Treat” will be pricey.
“Your sweet tooth may have to pay a pretty penny to be satisfied,” Lisa Thompson, a savings expert for the Shopmium cashback app, told Axios.
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