Better Beet Seed.
         Better Revenue.

By: Tom Lutey, Billings Gazette

With hysteria mounting over America's snack and candy companies allegedly running out of sugar, farmers of the sweet stuff have issued the following advisory: Don't be a sucker.

"We have sugar and we have good, quality sugar," said Inder Mathur, president and chief executive officer of Western Sugar Cooperative, which refines sugar in Billings. "There are a lot of misrepresentations in the press regarding the availability of sugar."

At issue are warnings by the nation's largest food companies that America will "virtually run out of sugar" if the U.S. Department of Agriculture doesn't lift restrictions on sugar imports. The companies warned of an imminent shortage in an Aug. 5 letter to U.S. Agriculture Secretary Tom Vilsack. The letter was signed by executives from Kraft Foods Inc., General Mills Inc., Hershey Co. and Krispy Kreme, among others.

On the frankest of terms, the petitioners say the pending crisis signals not only a potential supermarket no-show by thousands of snacks, but also high food prices and lost jobs. The food companies grounded their forecast in recent USDA World Agriculture Supply and Demand Estimates, which they said indicated only a 13-day supply of sugar on hand by early 2010.

The Wall Street Journal wrote about the food industry's concerns Aug. 13. Cable and networks CNN and Fox News reports followed, warning that America's sweet tooth was about to take a hit.

By Aug. 19, the crisis was being lampooned on Comedy Central's "Colbert Report." Host Stephen Colbert interrupted his broadcast five minutes into the episode to announce the sugar shocker.

"Oh my God, there's a sugar shortage," Colbert shouted. The comedian then produced a glass case containing on emergency bag of Domino cane sugar, with which he doused himself after breaking the glass to liberate the bag.

"That always calms me down. Until the ants come."

"Like interstate highways and potable water, it's the government's fault," Colbert explained.

The United States has an elaborate system of tariffs and quotas that assure that 85 percent of the country's sugar is American grown. Those regulations have driven sugar's price to a 28-year high, souring the mood of the nation's food companies.

Western Sugar and other members of the American Sugar Alliance have countered food company allegations by placing in the Wall Street Journal large ads featuring an open letter to the food companies that wrote the USDA.

"America's sugar producers have plenty of sugar to sell you, yet we're having problems finding buyers for our extra inventory," the ad states.

The letter continues by explaining that based on record imports from other countries this year, plus the size of the current sugar beet and cane crops, the USDA has increased its supply and demand estimates for sugar.

"Hopefully your intent was not to intentionally mislead or scare the nation's media, the general public, or the Secretary of Agriculture. P.S. As leaders from your industry have boasted that profit margins in the confectionary business average more than 30 percent, we would also like to discuss how sugar production might be able to replicate your monetary successes at a time when farmers, like other Americans, are struggling."

Mathur said Western Sugar farmers in Montana should have a record harvest this year. The summer weather has been ideal for growing beets.

"I think the USDA is listening to both parties, and I think they understand that there isn't a shortage," Mathur said. "I believe that the USDA is going to stay put knowing the sugar is there."