Sugar Outlook: Sweeter Times Ahead for Sugarbeet Growers and Processors

Key Points

• The severe crop production losses for the 2019-20 marketing year inflicted significant financial stress on many U.S. sugarbeet growers and processors.
• Many U.S. sugarbeet growers financed their spring crop planting with crop insurance indemnity payments and financial aid from USDA while processors struggled with less throughput and lower extraction rates amid high fixed costs.
• The smaller Mexican cane sugar crop and capacity constraints to convert raw sugar to refined sugar in the U.S. will continue supporting U.S. sugar prices heading into this fall’s sugarbeet harvest, which should allow U.S. processors to market their expected record crop at lofty prices.
• COVID-19 has had minimal impact on total U.S. sugar demand, but processors will be watching retail and food service sales closely in the months ahead as state and local economies reopen.
• Assuming normal harvest weather returns this fall, U.S. sugarbeet growers and cooperatives are expected to have a stronger year financially for the 2020-21 crop. Improved production and high prices offer a much needed recovery from the stressful 2019-20 growing season.

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