Issue #12
December 30, 2014
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Message from Chip Smith, President:
Well, I hope you all had a wonderful holiday season, and find yourself happy and
healthy at the start of 2015. This past year brought a good amount of drama and turmoil
to the sweetener world. As always, it will be interesting to see what the coming year
holds for us. Hopefully, I will see many of you in Florida for the International Sweetener
Colloquium. Also, if you have not, please do send in your dues for 2015.
As always, enjoy the articles included in this newsletter.
Best Regards,
Chip Smith, President
Also in this issue: (Click on the Headline, or scroll down to the document)
12/01 - Rabobank: Agri commodity prices expected to trend lower or remain stable in 2015
12/02 - Settlement fund in stevia deceptive marketing lawsuit alleging Truvia is not 'natural' rises to $6.1m
12/03 - White Sugar Falls to 5-Year Low After Oil's Drop; Coffee Rises
12/04 - U.S. ethanol production at record rate
12/04 - Berg: $37 payment to American Crystal growers is 'miserable'
12/05 - Ivory Coast, Ghana may face slow cocoa season as trees tire
12/07 - U.S. Sugar Soars Above World Prices
12/08 - Monsanto exec: GMOs are not the Holy Grail. They are an important tool if used properly.
12/10 - Japan weather bureau declares first El Nino in five years
12/11 - Global maltodextrin boom sparks Kent Corporation corn expansion
12/11 - USDA raises record world wheat production forecast
12/11 - J.M. Smucker to raise its coffee prices Jan. 5
12/11 – December issue of the SUGAR AND SWEETENERS OUTLOOK
12/12 - Cargill says corn sweetener supplies are "limited"
12/17 - McCormick stirs up liquid sauces category
12/19 - 5 GMO food myths dispelled
12/22 - US, Mexico reach deal to suspend sugar antidumping, countervailing duty cases
12/22 - Sugar buyers slam NAFTA sugar pact, shift focus to Australia, Canada
12/22 - Cargill sees positives in progress with Cuba
12/30 – Nigeria May Miss Cocoa Output Target as Disease Takes Toll
12/30 - Cocoa butter prices, bean differentials fall to multiyear lows
http://www.foodnavigator-usa.com/content/view/print/1020363
Dec. 01, 2014: By Elaine Watson+, FOODnavigator-usa.com
Rabobank: Agri commodity prices expected to
trend lower or remain stable in 2015
Agri commodity process will trend lower or remain stable in 2015, predicts
Rabobank, which says favorable growing season conditions through 2014
coupled with moderate consumption growth have improved stocks of crops
including soybeans, corn and cocoa.
In ‘Outlook 2015: Rebalancing after finding the lows’, Rabobank analysts say bumper harvests of most
grains and oilseeds have improved world supplies, cocoa stocks are “projected to build somewhat”,
and “record-large stock levels will continue to hang over the sugar and cotton markets through 2015,
limiting the extent of price recovery”.
Coffee and beef prices to remain firm
However, beef supplies will remain low in 2015 (US cattle numbers are predicted to decline further in
2015), and coffee supplies will also remain tight, meaning prices of both will likely remain steady,
predicts the bank.
And for beef, says Rabobank, “With record tight supplies of all classes of cattle in North America, any
surprises in production could send the market into a continuation of price advances… and drive lean
beef prices to new record levels.”
As for coffee, it warns: “Given the fragile situation of coffee trees in Brazil, a major decrease in
production is not yet out of the question if adverse weather persists or intensifies. If realized, the supply
situation could become truly critical, driving prices high enough to curb demand.”
Palm oil prices expected to rise
Palm oil prices, meanwhile, are expected to rise as growth in demand outpaces the growth in
production, while corn prices are also predicted to rise slightly as increased production in the US is
offset by cutbacks in Brazil, Argentina and Ukraine.
Key variables will be the strength of the US dollar, Chinese demand (Rabobank expects a downward
revision of China’s 7.5% annual growth rate in 2015 buts says import demand remains uncertain),
slowing demand for biofuel, and weak oil prices.
Chairman of the executive board Wiebe Draiijer added: “The wide price swings of previous seasons
are not expected to be as pronounced in the year ahead, as stock levels have improved. However,
agri-commodity markets will still remain volatile in 2015 as stocks are not yet at levels to buffer
significant supply or demand shocks."
http://www.foodnavigator-usa.com/content/view/print/1020349
Dec. 02, 2014: By Elaine Watson+, FOODnavigaor-usa.com
Settlement fund in stevia deceptive marketing lawsuit
alleging Truvia is not ‘natural’ rises to $6.1m
A court in Hawaii has approved a settlement between Cargill and a series of
plaintiffs alleging it misled shoppers by marketing its Truvia consumer products
(which contain stevia extract Reb-A and erythritol) as ‘natural’.
The Nov 26 agreement settles four class action lawsuits filed in 2013, and extends a settlement
agreement we reported on last September. It also increases the settlement fund (for cash refunds or
vouchers for consumers that bought Truvia products) from $5m to $6.1m, and awards attorneys fees
and costs of up to $1.83m.
Extraction and processing methods mean a reasonable consumer would no longer consider
Truvia to be ‘natural’
The lawsuits allege that Cargill misled shoppers by marketing its Truvia tabletop sweetener as ‘natural’
as the Reb-A steviol glycoside it contains is "highly chemical processed" and the bulking agent
(erythritol) is “synthetically made”. According to plaintiff Denise Howerton, while the Reb-A is derived
from a natural source (the stevia leaf), the extraction and processing methods mean a reasonable
consumer would no longer consider it to be ‘natural’. Meanwhile, erythritol, a zero calorie, tooth-friendly
bulk sweetener, is “synthetically made”, she claimed. Howerton’s lawsuit added: "Cargill manufactures
Truvia's synthetic erythritol in a patented process by first chemically extracting starch from GM corn
and then converting the starch to glucose through the biochemical process of enzymatic hydrolysis.
The glucose is then fermented utilizing moniliella pollinis, a yeast." A reasonable consumer, she
argued, "understands a natural product to be one that does not contain man-made synthetic
ingredients, is not subject to harsh chemical processes and is only minimally processed."
Are the changes Cargill has agreed to make ‘substantive’?
Under the settlement, Cargill does not admit liability, and still reserves the right to call Truvia a ‘natural
sweetener' or 'Nature’s Calorie-Free Sweetener'. However, it has agreed to make changes to its
labeling and marketing, which attorneys representing the plaintiffs described as “substantive”.
Specifically, Cargill agreed to:
Put a notice on its label directing consumers to the Truvia website for clarification about how the
ingredients are made.
Clarify its “Nature’s Calorie-Free Sweetener” and “Truvia Natural Sweetener provides the same
sweetness as two teaspoons of sugar” statements by adding an asterisk inviting consumers to look at
the FAQ page of its website so they "can fully understand how the product is made and why Cargill
believes it is natural".
Remove the phrase “similar to making tea” on Truvia consumer products (the lawsuit disputed whether
the fermentation process used to obtain stevia extract was really similar to distilling tea in a teapot).
Melissa Wolchansky, attorney with Halunen & Associates in Minneapolis and a lead plaintiff’s attorney
in the lawsuit, added: “The plaintiffs demanded that Cargill change its marketing to be more
transparent with consumers about what was in Truvia and how it was manufactured. And that is exactly
what Cargill agreed to do to settle the case.”
Cargill still gets to call Truvia 'natural'
So what do food law attorneys make of the settlement?
David L. Ter Molen, a partner in the Chicago offices of law firm Freeborn & Peters LLP, told
FoodNavigator-USA that the fact Cargill can still call the products 'natural' - albeit with an asterisk meant it was hard to see the settlement as a huge victory for the plaintiffs. "A central premise for
plaintiffs in many labeling 'all natural' class action lawsuits is that consumers can be misled by claims
on the front of a product even if the alleged deception is dispelled by the ingredient list on the back of
the package," he said. "The settlement in this case runs contrary to this view by allowing 'natural'
claims to continue while relegating 'substantive' labeling changes to asterisks that direct consumers to
the FAQ section of Truvia’s website. That website is far less relevant to consumers when selecting a
product at the grocery store than the ingredient list, so it is certainly unusual that plaintiffs would agree
to this resolution given the nature of the claims. It appears consistent with similar cases. What is
unusual, however, is that those other cases usually involve more substantive labeling changes."
This is one of the highest settlements to date for a 'natural' labeling lawsuit
However, Rebecca Cross, a San Francisco-based attorney at BraunHagey & Borden LLP, noted that
this is "one of the highest settlements to date for a 'natural' labeling lawsuit". The case was also
"different than the typical, boilerplate complaints" in many other all-natural lawsuits in that the plaintiffs
"alleged that Cargill misled consumers about how Truvia is manufactured, not simply that it misused
the term natural", she added. "It is unfortunate that companies like Cargill are paying out seven-figure
settlements. Where these cases are litigated, courts have refused to certify them for class treatment
because there are no 'damages' to any of the plaintiffs."
Kristen Polovoy of Montgomery, McCracken, Walker & Rhoads LLP, said $6.1m was in the ballpark of
other recent settlements in deceptive advertising cases such as Dreamfields Pasta ($7.9m); Kashi
($5m),Trader Joe’s ($3.38 m), ConAgra ($3.2m), Barbara’s Bakery ($4m) and Red Bull ($13m). She
also noted that Merisant and Whole Earth Sweeteners recently agreed to pay $1.65m to settle a similar
case over Pure Via stevia-based sweeteners (Angel Aguiar v Merisant Co) and add an asterisk on the
packaging directing
consumers to a website.
Cargill: Truvia products are made from natural ingredients
Cargill, meanwhile, told us that it was pleased to have reached a settlement, but added: "We stand
behind the labeling of our Truvia natural sweetener consumer products. Those products are made from
natural ingredients and the labeling meets all applicable legal and regulatory guidelines. Putting this
matter behind us enables us to focus all our attention on our products and our consumers which has
always been our first priority. We are pleased to provide our consumers with more information about
our product."
The case is: 14-cv-00218 in the US District Court for Hawaii.
http://www.bloomberg.com/news/2014-12-03/white-sugar-falls-to-5-year-low-after-oil-s-drop-coffee-rises.html
Dec 3, 2014: By Morgane Lapeyre, Bloomberg.com
White Sugar Falls to 5-Year Low After Oil’s Drop; Coffee Rises
White sugar fell to the lowest in more than five years following the rout in crude oil prices, while
demand for the refined sweetener remains subdued.
Brent crude prices last week plunged below $70 a barrel for the first time since 2010 as the
Organization of the Petroleum Exporting Countries took no action to ease a global supply glut. That
helped to propel the Bloomberg Commodities Index of 22 raw materials to a five-year low.
“Funds are getting out of most commodities,” Naim Beydoun, a broker at Swiss Sugar Brokers in Rolle,
Switzerland, said by phone today. “With oil prices falling, they fear deflation and this is bearish for
commodities including sugar.”
White sugar for March delivery fell as much as 1.1 percent to $396.10 a metric ton, the lowest for a
most-active contract since April 2009. The commodity traded at $398.20 at 2:07 p.m. on ICE Futures
Europe in London. Crude oil stabilized this week.
The world sugar market was in surplus for four consecutive seasons through 2013-14, according to the
International Sugar Organization. Supply also will exceed demand by 473,000 tons in the current
season, while 2015-16 may see the start of a “new deficit phase,” according to the London-based
organization.
Demand has been weak for almost two years, according to Beydoun. “This is going to put a lot of the
newest refineries in difficulty,” he said.
Raw sugar for March delivery dropped 0.3 percent to 15.20 cents a pound on ICE Futures U.S. in New
York, declining for a second day. Futures trading volumes were 21 percent higher than the average for
the last 100 days for this time of day, according to data compiled by Bloomberg.
Robusta coffee for January delivery rose 0.6 percent to $2,047 a ton in London. Arabica coffee futures
for March delivery advanced 0.9 percent to $1.8505 a pound in New York.
Cocoa for March delivery was little changed at 1,903 pounds ($2,984) a ton in London. Cocoa for
delivery the same month was little changed at $2,863 a ton in New York
http://www.world-grain.com/news/news%20home/LexisNexisArticle.aspx?articleid=2256425186&e=INSERT_EMAIL
Dec. 04, 2014: WORLD-GRAIN.com
U.S. ethanol production at record rate
U.S. ethanol production is likely to continue at a record rate despite its rare premium to gasoline as
cheap corn, high biofuel prices and even cool weather provide ideal conditions and strong profit
margins.
There's no sign that says we should slow production. The mentality is that everyone is running, said
Todd Becker, chief executive of Green Plains Inc, the fourth-largest U.S. ethanol producer behind
Archer Daniels Midland Co, POET LLC and Valero Energy Corp.
The industry runs much better in the cold than the heat because we don't have to cool the plants down.
This is the plants' sweet spot, Becker said.
The U.S. Energy Information Administration last week said ethanol production averaged 982,000
barrels per day in the week ending Nov. 21, the largest volume in the dataset that started in 2010. The
agency will release new weekly figures on Wednesday.
Production surged 6 percent from the same period last year as multimonth highs in ethanol futures
resulted in the best profits for biofuel makers since summer.
Export demand for ethanol is booming, up more than 40 percent so far this year, helping to make
ethanol more expensive than gasoline in some domestic markets. Meanwhile, costs to make ethanol
have declined in the wake of a record-large U.S. harvest of corn, of which about a third is used for
ethanol.
We're running at capacity and our plants are filled to capacity with corn, said Jim Seurer, chief
executive of Glacial Lakes Energy LLC, which has two South Dakota ethanol plants that each can
produce as much as 100 million gallons annually.
The ethanol trade group the Renewable Fuels Association pegs annual stated production capacity - or
nameplate capacity - at about 14.9 billion gallons, or 354 million barrels. But many ethanol plants can
produce above that and production could reach a peak of 1 million barrels per week, said Scott Irwin,
an agricultural economist at the University of Illinois at Urbana-Champaign.
However, ethanol futures are trading at a 30-cent premium to gasoline futures, the second-largest in
the last five years. If that disparity persists, ethanol demand from fuel blenders could decline. Ethanol
is less fuel efficient than gasoline but is cleaner-burning and higher-octane.
These price relationships that we see right now are obviously unsustainable. Either ethanol has to
come down or gasoline has to go up, Irwin said. 2014 Global Data Point
http://www.agweek.com/event/article/id/24561/
December 04, 2014: By: Mikkel Pates, AGWEEK.com
Berg: $37 payment to American Crystal growers is ‘miserable’
FARGO, N.D. — Most American Crystal Sugar Co. farmers will lose money on the 2014 crop at current
price projections, but company officials say things will improve next year. David Berg, president and
CEO for the Moorhead, Minn.-based co-op, told attendees at the company’s annual meeting Dec. 4 in
Fargo that the $37 payment projection is “miserable.” Co-op members averaged a lack-luster 23.1 tons
of sugar beets per acre. The sugar content is 17.4 percent, less than the desired 18.4 percent average,
so there’s less sugar to sell.
Berg said the prospects are improving for next year. Right off the bat, farmers can expect normal
planting times and should benefit from current progress in averting a glut of subsidized Mexican sugar.
U.S. sugar producers won a trade case and is negotiating “important strictures in the marketplace that
will prevent Mexico from oversupplying our market going forward,” Berg said.
Sugar prices have rebounded to some degree since last spring, but Berg noted it was after American
Crystal sold much of its crop, so it’s not likely to translate into a bigger payment for growers.
Some growers privately admit they expect the conservative projection to grow, as it did for the 2013
crop, which ultimately was $45.23 per ton.
Reshaping operations
Robert Green, chairman of the board and a farmer from St. Thomas, N.D., praised American Crystal
growers for defying predictions and said they “reshaped their farms and their farming entities in the
face of these gloomy economics.”
Things looked bad last year, too, Green said, but co-op members stuck together.
“Long story short, all of our shareholders planted all of their acres last spring, in spite of the projections
of less-than-stellar returns,” Green said. In fact, after a late planting season that could have left the
company short of beets, dozens of growers answered a call to plant an additional 20,000 acres to keep
the company from falling short of its 10.5-million-ton need for beets.
“We can speculate all we want about the how and why behind these farmers’ decisions, but they
responded quickly and affirmatively,” Green said. “That was very gratifying, and those farmers’ actions
will add to every farmers’ profitability this year.”
Rail headaches
Shelly Van Treeck, chief procurement officer and vice president of global procurement for Kellogg Co.,
told shareholders their company’s sugar marketing arm, United Sugars Corp., supplies some 75
percent of Kellogg’s sugar. “That’s a compliment to all of you, as well as a big obligation,” Treeck said.
She said, however, that capacity issues in rail are a big problem in getting products to Kellogg’s
factories. She said transportation problems caused by slow loading of BNSF Railway cars have had
their effect. When Kellogg’s plants must slow down, it’s a huge disruption and expense, Treeck said.
“It goes on our customer’s scorecard for our service levels,” she said. “We have suffered 2, 3 and 4
percentage points during a couple of months of 2014. The impact to our business on transportation
expense alone was six figures per month.“
http://af.reuters.com/article/investingNews/idAFKCN0JJ1HK20141205
Dec 5, 2014: By Ange Aboa and Matthew Mpoke Bigg, REUTERS Africa
Ivory Coast, Ghana may face slow cocoa season as trees tire
ABIDJAN/ACCRA (Reuters) - Several bumper cocoa crops have left trees in Ivory Coast and Ghana
fatigued, farmers and exporters said on Friday, raising concern that the world's top two producers may
struggle to rebound from a sluggish start to the season.
Leading cocoa grower Ivory Coast harvested a record crop of over 1.74 tonnes last season, topping a
previous record set two years earlier. Ghana has roughly tripled its cocoa output over the past decade.
The Coffee and Cocoa Council (CCC), Ivory Coast's marketing board, has already lowered its
production target to around 1.6 million tonnes.
"It's like with a man. You can work hard for a long period, but if you don't rest, you'll struggle to do half
what you were able to do before," said Dominique Kouadio, explaining the drop in output from his
plantation in Ivory Coast's Soubre region.
Cocoa arrivals at Ivorian ports in the first two months of the 2014/15 season were down around 10
percent from the previous season, according to exporters estimates.
Ghana, meanwhile, saw a drop in cocoa purchases of nearly 62 percent through the first three weeks
of the season.
Ghana's slow start may be related in part to delays in financing certified buyers but farmers blamed
outbreaks of fungal black pod disease and a high mortality rate for flowers.
While the lower arrivals and purchases figures were largely anticipated by most traders, there remains
disagreement over what will happen next.
Optimists predict that arrivals between January and March, which saw an uncharacteristically deep dip
last season, will largely offset the early slump.
"The harvest this year is delayed. We'll have bigger volumes from January to March than in other
years," one fund manager told Reuters.
Jonathan Parkman, joint head of agriculture at commodities brokers Marex Spectron, took a more
conservative view.
“There are those saying arrivals are going to massively exceed last year and even exceed 2012/13,"
he said. "The argument against that is we don't think the survival will be good enough for that, given
normal weather."
The first three months of the year coincide with the height of the dry season and the arrival of the
dusty, desert Harmattan winds.
This season's fatigued trees will struggle to resist harsh conditions particularly if they are amplified by
El Nino weather patterns, said Edward George, Head of Group Research at Ecobank.
"I think, if anything, that's where there's the risk that that weakness will persist," he said. "Inevitably it's
going to be a smaller crop this year."
http://www.wsj.com/articles/u-s-sugar-soars-above-world-prices-1417999637
Dec. 7, 2014: By Alexandra Wexler, THE WALL STREET JOURNAL
U.S. Sugar Soars Above World Prices
Candy Makers Prepare Price Increases
ORANGE, Conn.—A strong, sweet smell emanates from the office-cum-factory of PEZ Candy Inc.,
where colorful pellet-size treats are molded and packaged with their signature flip-top dispensers. But
the bitter truth is that the price of PEZ is going up.
PEZ Candy will likely raise prices next year because of higher costs for sugar—the sweetener makes
up about 95% of the candies—and labor, according to Joseph Vittoria, the privately held company’s
chief executive. In an interview, Mr. Vittoria said that while PEZ will increase prices world-wide, its
customers in the U.S. will feel the bite more than those in many other countries.
Sugar is getting dearer in the U.S. even as it is getting cheaper in most other places. Prices in the
global market traded near 5½-year lows in September, though they have rallied a bit since. In the U.S.
futures market, the sweetener is 58% more expensive than on the global market.
U.S. sugar for delivery in March settled at 23.98 cents per pound Friday on ICE Futures U.S., while the
contract used as a benchmark for global prices ended at 15.14 cents a pound.
A year ago, the gap between the two contracts was only 2 cents. Back then, record imports from
Mexico created a glut and sent U.S. prices plunging. Some growers defaulted on federal loans, costing
the government more than $250 million.
U.S. sugar prices are typically a few cents higher than the world rate due to government policies that
restrict imports and support growers. But the gap blew out this year after the government threatened to
slap taxes on imported Mexican sugar at the behest of U.S. growers.
Mexico struck a preliminary deal in October to send less sugar to the U.S., which has eased the
difference between U.S. and global prices in the futures market. But big buyers like candy makers have
been snapping up sugar during the recent pullback because they don’t think domestic suppliers can
fully replace Mexican imports.
The U.S. is the world’s fourth-largest sugar consumer and relies on imports—most of which come from
Mexico—for about 25% of its supply.
“The scarcity will drive prices up,” said Mr. Vittoria. “That is a frightening thought, because sugar is the
lifeblood of our industry.” PEZ Candy is the North American subsidiary of PEZ International GmbH,
based in Traun, Austria.
Rising prices for sugar could soon start showing up in other products in the U.S. Prices for cocoa and
dairy are also up sharply this year. Large chocolate makers, including Hershey Co. and Mars Inc.,
raised prices in July. Sugar is the No. 2 ingredient in most chocolate candy after cocoa and a key
ingredient in foods ranging from cereal to baked goods.
Unlike other sugar exporters such as Brazil or Thailand, Mexico can sell sugar in the U.S. tax free
under the North American Free Trade Agreement.
But U.S. growers complained in March that Mexico was subsidizing its sugar industry and dumping
supply in the U.S. The Commerce Department slapped a preliminary tax as high as 64.27% on
Mexican sugar, drafting an agreement to suspend the tariffs only when the country agrees to restrict
exports and charge higher prices to avoid undercutting U.S. growers. That agreement has yet to be
finalized. Such tariffs are allowed under Nafta in certain rare cases, trade experts said.
The U.S. Department of Agriculture said it expects Mexico to export about 26% less sugar year over
year to the U.S. during the season that began Oct. 1. With Mexican imports expected to be limited,
“there’s no more wild card in the sugar deck” that could flood the U.S. with sweetener and push prices
lower, said Frank Jenkins, president of JSG Commodities, a brokerage in South Norwalk, Conn.
Prices are cheaper in India and Brazil, the biggest and third-biggest sugar consumers, respectively,
which like the U.S. produce much of their own supply. The median U.S. retail sugar price was 56 cents
a pound in October, compared with 35 cents in Brazil and 28 cents in India, according to Premise Data.
Prices are higher in China, the No. 2 consumer, where the market is heavily regulated.
Global sugar prices have hovered near five-year lows for much of 2014 as booming production out of
Brazil swamped the market. Some analysts see world prices falling further as Mexican sugar once
destined for the U.S. adds to the glut.
“There will be much more Mexican sugar in the world market,” said Sergey Gudoshnikov, a senior
economist at the International Sugar Organization in London. “It adds some bearish pressure.”
The restrictive policies by the U.S. are designed to prevent price declines that would be harmful to the
U.S. sugar-processing and farming industries.
But the federal sugar price-support program has come under fire from food-and-beverage companies,
which argue their costs are higher because sugar gets more protections than other crops. Lawmakers
introduced several bills to overhaul the program in Congress last year, but none passed.
Defenders of the price floor and import limits say they are a safety net for the domestic sugar industry
and that some processors wouldn’t be able to operate without U.S. government-backed loans.
The American Sugar Alliance, an industry group that supports the government’s program, declined to
comment.
The PEZ factory in Connecticut uses about 75,000 pounds of the sweetener a week, Mr. Vittoria said.
The company has bought a large amount of sugar since the agreement with Mexico was announced
and has fixed all of its prices for 2015, because prices are likely to rise, he added.
“We are looking carefully at protecting our 2016 pricing before the anticipated increases driven by the
controls put onto imported sugar,” Mr. Vittoria said.
http://www.foodnavigator-usa.com/content/view/print/1022935
Dec. 08, 2014: By Elaine Watson+, FOODnavigator-usa.com
Monsanto exec: GMOs are not the Holy Grail.
What they are is an important tool if used properly.
Genetically engineered crops are not a magic bullet and some weeds have
become resistant to the herbicide glyphosate (RoundUp) used with selected GM
crops, said Monsanto’s chief technology officer Dr Robert Fraley in a debate on
Wednesday. But that doesn’t mean the whole ag-biotech experiment has ‘failed’
and that we should throw out the GM baby with the bathwater.
Dr Fraley was speaking at a live debate hosted by Intelligence Squared in which he and UC Davis
genomics & biotech researcher Dr Alison Van Eenennaam argued for GM food crops and Washington
State University research professor Dr Charles Benbrook and Union of Concerned Scientists science
policy consultant Margaret Mellon argued against. Before the debate, 38% of the audience was
undecided on GM crops, 32% was in favor, and 30% was against. After the debate, 60% voted in
favor, 31% against and 9% remained undecided.
Have GM crops reduced or increased the use of pesticides?
Much of debate covered familiar ground over safety (those in favor pointed to 100s of studies
supporting safety, those against felt the precautionary principal should apply) but the most lively
sections explored one aspect of the debate that constantly confuses people: have GM crops reduced
or increased the use of chemical pesticides?
Much of the confusion relates to the fact that the word pesticides covers both herbicides (which kill
weeds) and insecticides (which kill insects), said speakers. It is a well-documented fact that insecticide
use has gone down significantly since the introduction of Bt crops engineered to produce their own
insecticide from the soil bacterium Bacillus thuringiensis (Bt), said Dr Fraley, noting that it is “the very
same bt protein that has been used by organic farmers for years”. Meanwhile, yields have gone up
because the pests no longer destroy as much of the crop.
However, herbicide use has gone up, claimed Margaret Mellon. And the issue of weeds developing
resistance to glyphosate (RoundUp) - a herbicide used with some GM crops - is a huge problem,
claimed Mellon, who said farmers were now using more of it, and supplementing it with other, more
harmful herbicides because it is no longer as effective. “Glyphosate is no longer as useful as it once
was, and it's getting less useful every day because resistant weeds are coming, and those resistant
weeds are leading to greater and greater use of herbicides.”
Dr Benbrook added: “In the case of the herbicide tolerant crops, the great concern is this huge
increase in herbicide use that's started about a decade ago and has gotten worse and worse and
worse each year. So, if you've reduced insecticide use by 100 million pounds, that's a good thing, but
herbicide use has gone up by 600 million plus pounds... So how do you come up with pesticide use
going down [thanks to GM crops]? It's just not true.”
Fraley: Should drug companies stop developing new antibiotics just because we’ve built up
resistance to the old ones?
But this was not a reason to throw the baby out with the bathwater, said Dr Fraley, who noted that
farmers are constantly having to adapt the tools they deploy to keep pests, weeds and other threats to
plants at bay, whether their crops are genetically engineered or not. “Concern over resistance
development is a concern that's been a concern from the beginning of time… Evolution is alive and
continues," he said. "And, frankly… as we get into issues of climate change and changes in
microenvironments, we'll probably see more evolution and more resistance. “[But] here's a simple
question: You've all heard of antibiotic resistance. It's a problem, right? You're aware of it. So what
should drug companies do? Should they not develop new antibiotics just because there's become a
resistance to an antibiotic? Absolutely not.” The solution, in GM as with any other form of agriculture, is
to improve the tools, he said. “I'm actually proud of the fact that we are developing our third and fourth
generation technologies and staying ahead of the curve.”
GMOs are not the Holy Grail
Meanwhile, it was also misleading to say that herbicide-tolerant GM crops no longer deliver benefits,
and that RoundUp no longer ‘works’, he said. “These crops have enabled farmers to use safer and
more environmentally friendly chemicals and replace the products that were previously used, but
they've also had a profound benefit to the environment, of enabling farmers to not plow their soils.” And
even factoring in the fact that some weeds have become resistant to RoundUp, he said: “It controls
hundreds of weeds. In this country, 12 of them have become resistant. But it still controls hundreds of
weeds. It needs to be used effectively. And, Chuck [Charles Benbrook], you were one of the first ones
to point out that we should actually use combinations of herbicides. And that's what growers are doing
today, and that's one of the benefits of being smarter and stewarding these products better.” He
added:“GMOs are not the Holy Grail. What they are is an important tool if used properly.”
Alison Van Eenennaam: Plant diseases destroy 15% of our world's agricultural harvest
“Food poisoning is a real risk, and 3,000 people a year die of food poisoning... Sometimes the risks
that concern people and the risks that kill people are entirely different. For too long the debate over the
merits of genetically modified food has focused on unrealized hypothetical risks and has been
conflated with the use of pesticides.” Dr. VanEenennaam, meanwhile, said the whole debate about
what pesticides we spray on high-profile GM crops like corn and soy diverted attention from scores of
other truly exciting applications of the technology, particularly in relation to tackling plant viruses.
“Other introductions include drought resistant corn, virus resistant squash… nitrogen efficient and
flood-tolerant rice…consumer traits like a non-browning apple, a low-acrylamide potato, and crops
produced oils with improved for nutrition. None of these applications require the use of any chemical
pesticides. Researchers are working to develop GM oranges that are resistant to citrus greening
disease, something that is devastating the Florida orange industry. Plant diseases destroy some 15%
of our world's agricultural harvest, a number that is likely to grow as our climate changes.” Meanwhile,
a genetically engineered papaya has “literally saved the Hawaiian papaya industry” from a devastating
plant virus, she added. “There are many publicly funded groups around the world, working to develop
GM-disease resistant varieties of crops, including apples, bananas, cassava… eggplant, grapes,
potatoes, rice, sweet potatoes, and wheat. “Some of these staple crops are an essential source of
nutrient in the diets of the poor. All of these applications focus on controlling disease with genetics
rather than chemicals, an objective that I would argue is compatible with agroecology, sustainability,
and feeding more people better with less environmental impact.”
Margaret Mellon: Compared to the vision, the early vision, it's a big disappointment
“Glyphosate is no longer as useful as it once was, and it's getting less useful every day because resistant weeds are
coming, and those resistant weeds are leading to greater and greater use of herbicides”. However, Dr Benbrook said much
of what had been promised had not been delivered: “What's the reality of genetic engineering agriculture today as opposed
to the promise or the aspiration?” Mellon added: “There’s just no doubt that compared to the vision, the early vision, it's a
big disappointment.”
http://in.reuters.com/article/2014/12/10/elnino-japan-idINKBN0JO0KY20141210
Dec. 10, 2014: by Yuka Obayashi, REUTERS
Japan weather bureau declares first El Nino in five years
(Reuters) - Japan's weather bureau said on Wednesday that an El Nino weather pattern, which can
trigger drought in some parts of the world while causing flooding in others, had emerged during the
summer for the first time in five years and was likely to continue into winter.
That marks the first declaration by a major meteorological bureau of the much-feared El Nino
phenomenon, which had been widely expected to emerge this year.
El Nino - a warming of sea-surface temperatures in the Pacific - can prompt drought in Southeast Asia
and Australia and heavy rains in South America, hitting production of food such as rice, wheat and
sugar.
The Japan Meteorological Agency (JMA) forecast last month that the possibility of an El Nino pattern
forming this winter was higher than the 50 percent it had projected in its previous monthly prediction.
But on Wednesday it said that an El Nino had emerged between June and August, continuing into
November.
"We can't tell whether or not El Nino will continue until spring, but we can say that there is a higher
chance of it continuing in the winter," said Ikuo Yoshikawa, a JMA forecaster.
The Japanese weather bureau does not classify or predict the size of El Nino, he said.
Last week, the Australian Bureau of Meteorology said that climate models suggest El Nino weather
conditions would occur over the next three months, although related weather patterns are already
being witnessed.
The U.S. weather forecaster also projected last week a 65 percent chance of El Nino conditions during
the Northern Hemisphere winter and into spring, up from a 58 percent chance predicted early in
November.
http://www.bakeryandsnacks.com/content/view/print/1026573
Dec. 11, 2014: By Kacey Culliney+, Bakeryandsnacks.com
Global maltodextrin boom sparks Kent Corporation corn expansion
Kent Corporation’s subsidiary Grain Processing Corporation (GPC) will expand
its maltodextrin processing capacity by 30% to meet increasing global demands.
The multimillion dollar investment in its Indiana GPC plant will be the largest expansion since it started
operations. The processing plant produces the company’s branded maltodextrin Maltrin – used in
foods and beverages as carriers, binders, coatings, bulking agents and for flavor management.
Janet Sichterman, senior vice president and corporate spokesperson for Kent Corporation, said the
expansion had been prompted to meet the increasing global demand for maltodextrins. “We have said
this will increase our finishing capacity by 30%,” she told Milling & Grains. The maltodextrins produced
at the plant were predominantly shipped within the US, she said, but global shipments would also
occur.
John Thorpe, president of GPC, said: “GPC Washington, built just over 15 years ago as a state of the
art corn wet milling facility, has been an important investment in meeting the demands for an
uninterrupted supply of high quality products for our customers. We are confident the entire employee
team at Washington, along with Indiana state and local teams, will
accomplish this expansion as quickly as possible.”
CEO of Kent Corporation Gage Kent said it was the positive local mentality and economical
development that would assist in successful growth.
http://www.worldgrain.com/articles/news_home/World_Grain_News/2014/12/USDA_raises_record_world_wheat.aspx?ID={F2C6431FB6AC-478A-9187-14214B96F0C5}&e=penner@cass.net&cck=1
12/11/2014 - by World Grain Staff
USDA raises record world wheat production forecast
WASHINGTON, D.C., U.S. — The U.S. Department of Agriculture (USDA) in its Dec. 10 World
Agricultural Supply and Demand Estimates forecast global 2014-15 wheat production at a record
722.18 million tonnes, up 2.32 million tonnes from 719.86 million tonnes as the November projection
and up 7.41 million tonnes or 1%, from 714.77 million tonnes in 2013-14, the previous record.
The USDA forecast 2014-15 global ending stocks of wheat at 194.9 million tonnes compared with
192.9 million tonnes as projected in November and 185.30 million tonnes estimated for 2013-14. The
average pre-report trade estimate was 192 million tonnes for 2014-15.
World wheat consumption for 2014-15 was projected at 712.58 million tonnes, compared with 712.69
million tonnes in November and 703.93 million tonnes in 2013-14, and world exports were projected at
158.04 million tonnes compared with 154.92 million tonnes as the November forecast and 165.80
million tonnes last year.
“Global wheat consumption for 2014-15 is down slightly,” the USDA said. “The biggest change is a 1.5million-tonne decrease in European Union wheat feeding on larger coarse grain supplies and higher
wheat exports. Canada wheat feeding is raised 500,000 tonnes on the larger crop. Global ending
stocks are projected 2 million tonnes higher mostly on increases for Canada, the E.U. and Russia.”
World corn ending stocks in 2014-15 were projected at 192.20 million tonnes compared with 191.50
million tonnes as projected in November and 172.84 million tonnes in 2013-14. The average of prereport trade expectations for 2014-15 was 191.3 million tonnes.
“Global ending stocks at projected 700,000 tonnes higher mostly reflecting the larger China corn crop,”
the USDA said. “Small reductions in U.S. and E.U. corn stocks partly offset the increase for China.”
World soybean ending stocks for 2014-15 were projected at 89.87 million tonnes, compared with 90.28
million tonnes as the November forecast and 66.58 million tonnes in 2013-14. The average of prereport trade expectations was 89.9 million tonnes for 2014-15.
Ending soybean stocks for 2013-14 in the United States were projected at 11.16 million tonnes in
December compared with 12.25 million tonnes as the November forecast and 2.5 million tonnes
estimated for 2013-14. Ending stocks for 2014-15 in Brazil were projected at 24.38 million tonnes
compared with 23.95 million tonnes as the November outlook.
China was projected to import 74 million tonnes of soybeans in 2014-15, unchanged from November
and up from 70.36 million tonnes estimated for 2013-14.
“Global soybean production is projected at a record 312.8 million tonnes with gains this month for
Canada, Ukraine and Paraguay,” the USDA said.
http://www.cleveland.com/business/index.ssf/2014/12/jm_smucker_raising_the_price_o.html
Dec. 11, 2014: By Janet H. Cho, The Plain Dealer
J.M. Smucker to raise its coffee prices Jan. 5
CLEVELAND, Ohio -- The J.M. Smucker Co. said it is raising the retail price of Folgers, Folgers
Gourmet Selections, Cafe Bustelo and Millstone Coffee brand K-Cup packs sold in the U.S., by an
average of 8 percent starting Jan. 5.
The Wayne County-based food manufacturer said the price hike was "in response to sustained
increases in costs," but did not elaborate.
The warning comes less than a month after Smucker's second-quarter sales and profits for fiscal 2015
were "significantly impacted" by the company's decision to raise prices on Folgers roast and ground
coffee. Even though it did so because of higher green coffee costs, the price hike sent sales plunging
20 percent as shoppers switched to other brands.
But Wednesday's announcement could end up accelerating K-Cup sales in advance of the Jan. 5 price
hike. When Smucker told consumers in 2011 that it was planning to raise Jif peanut butter prices by 30
percent that November because of a national shortage of peanuts, sales soared.
J.M. Smucker, a 115-year-old family-run company that built its reputation on homemade fruit spreads,
now earns 46 percent of its sales and more than half of its profits from its lucrative coffee business.
Smucker's brands include the top-selling Folgers, Millstone, Cafe Bustelo, Cafe Pilon, and Dunkin'
Donuts coffee sold in supermarkets and warehouse clubs. (Smucker does not make the coffee,
pastries or other products sold in Dunkin' Donuts coffee shops.)
The company said last month that except for coffee, its other food brands are selling well, from
Smucker's jams and jellies to Crisco oils and shortenings to Robin Hood flour and TruRoots quinoa.
J.M. Smucker Chief Executive Richard Smucker said last month that coffee sales are expected to perk
up in the second half of this fiscal year, but warned that "the pricing impact of higher green coffee costs
will continue through the remainder of the fiscal year" that ends April 30, 2015.
The December World Agricultural Supply and Demand Estimates (WASDE) is now available in PDF,
XML, and Microsoft Excel formats at:
http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1194
Acrobat Reader, which is required to view and print the WASDE report, can be downloaded at:
http://www.adobe.com/products/acrobat/readstep2.html
The next release of the WASDE report will be January 12, 2015.
http://af.reuters.com/article/commoditiesNews/idAFL1N0TW27120141212
Dec 12, 2014: by Michael Hirtzer and Tom Polansek in Chicago and Chris Prentice in New York, REUTERS
Cargill says corn sweetener supplies are "limited"
Dec 12 (Reuters) - Cargill Inc told customers supplies of corn sweetener are "limited" for 2015 and
withdrew all outstanding offers, according to a letter obtained on Friday by Reuters from a sugar
industry source.
Cargill gave no reason for the move in the letter and a company spokesman did not immediately
respond to requests for comment.
Exports to Asia of sweeteners made from corn, most commonly sold as high fructose corn syrup
(HFCS), have risen this year. And while domestic demand has been declining, the U.S. Department of
Agriculture (USDA) surprised the market earlier this week by raising its forecast for corn used in
sweeteners in the 2014/15 season by 10 million bushels.
At the same time, corn supplies for refining into HFCS have been crimped by both record ethanol
production and slow sales of the grain from farmers after prices slumped in the wake of a massive
harvest.
Cargill said in its letter that orders for 2015 corn sweetener shipments would only be accepted with a
confirmed contract in place. It added that spot orders in 2015 would only be filled if product and
"appropriate freight" were available and if the contract was accepted at spot prices effective at the time.
The letter comes as pressure mounts on the U.S. and Mexican governments to finalize a deal to
suspend huge duties on sugar, corn syrup's major sweetener rival in North America.
Industry sources said at a conference in New York this week that Mexico will prepare a complaint
against imports of U.S. HFCS in response to the dispute over sugar.
Comments from the sweetener industry have suggested demand for HFCS is expected to remain
sluggish.
Chris Cuddy, president of sweetener and starches for No. 1 corn miller Archers Daniel Midland Co said
during an investor conference last week, "Unless something changes really soon, I won't be
asking...for any money to add (HFCS) capacity."
A spokeswoman for corn miller Ingredion Inc. in an email said the company was expanding in specialty
products to combat expectations for reduced sales of HFCS.
Total production of HFCS in the United States was 8,588,000 short tons dry weight in 2013 and
domestic use was 7,250,000 tons with 1,425,000 tons exported, according to data released earlier this
month by the USDA.
http://www.packagingdigest.com/pouches/mccormick-stirs-liquid-sauces-category141217?cid=nl.pkg04.20141217
December 17, 2014: By Kari Embree, PACKAGINGDIGEST.com
McCormick stirs up liquid sauces category
McCormick and Co. plans to expand into an already "packed" market for liquid sauces for one-skillet
meals where other offerings are already available from Campbell Soup, General Mills and Frontera to
name a few.
The skillet sauces come in an easy-to-open and -pour pouch design and are available in flavors like
"Stir-fry" and "Fajita."
The company is responding to the trend where busy consumers want a home-cooked, fresh tasting
family meal in little or no time, which is driving the sales of prepared foods. Also, research shows that
Millennials are taking up an interest in the kitchen.
“In the U.S., our data shows that both McCormick’s gourmet and everyday products are well
represented in Millennial households,” says Alan Wilson, chairman, president and CEO, McCormick &
Co., during an Oct. 2 call with financial analysts to discuss third-quarter performance.
The announcement came as McCormick reported a 1% drop in sales in the U.S. Overall sales rose 3%
on rising demand in China, Europe, Africa and the Middle East.
"We continue to be encouraged by the growing consumer demand for flavor in markets around the
world. To meet this demand, we are introducing exciting new products, including Skillet Sauces,
Freshlock herbs and, in early 2015, will relaunch our premium gourmet line in the U.S.,” says Wilson.
“These flavors leverage mainstream family favorites with a bit of a twist,” Wilson adds. “Both the
gluten-free items and skillet sauces are designed to build upon our momentum in the recipe mix
category. We are already gaining good retail acceptance of these new products and anticipate strong
consumer trial and repeat purchases. Again, improved results for our consumer business in the
Americas are going to take some time but we have had initial progress with the actions that we have
under way.”
http://www.foodnavigator-usa.com/content/view/print/1030174
Dec. 19, 2014: By Elizabeth Crawford,
5 GMO food myths dispelled
All the rhetoric for and against genetically modified organisms voiced leading up to
November when several states voted on GMO labeling initiatives can make it difficult to
understand exactly what genetic engineering is, let alone the benefits and downsides.
The Natural Products Association took advantage of the brief pause in the debate, afforded by the
lame duck session, to identify and untangle some of the myths, misperceptions and truths surrounding
GMO foods during a Dec. 17 webinar. Beginning with the basics, Gregory Jaffe, director of the Center
for Science in the Public Interest’s Biotechnology Project,
explained during the webinar the difference between genetic engineering and breeding and noted they
are both means to the same end. He added that separating out the truth from fiction about GE is
impossible without first fully understanding what it is.
GE allows scientists to move beneficial traits from one organism to another by inserting a gene into the
DNA of a plant or animal cell either with a gene gun, which literally shoots the gene into a cell, or
through agrobacterium, which infects plant chromosomes with altered plasmids, Jaffe explained. Once
this is done, scientists breed the plants or animals normally
and the new genes are replicated in the new cells. He noted agrobacterium “is a natural process of
sorts,” in that it “hijacks” the natural bacterial infection process to cross cell walls, which dispels antiGMO claims that genetic engineering is unnatural because it crosses cell barriers that are not
supposed to be crossed.
In addition, he explained that GE is a way to speed up and control the plant breeding process, which
scientists also use to suppress or magnify plant traits, such as yield, maturation time, flavor and other
qualities. Breeding, which is a much longer trial and error process, can achieve many of the same
outcomes as GE, Jaffe noted. However, he said, it only can occur between closely related species and
thus is usually limited to the DNA variety found within a species, unlike GE which can pull genes
across species. He added that plant
breeders have long used a variety of “unnatural” techniques to introduce variation into the DNA of a
species, including using chemicals, x-rays and gamma radiation to induce mutation.
In fact breeding, not genetic engineering, is how food scientists created seedless watermelons,
seedless cucumbers and plouts, Jaffe said. In addition, modern wheat was created through breeding,
not GM, he noted.
Jaffe also set the record straight on several other myths propagated by pro- and anti-GMO advocates.
Myth 1: Most U.S. crops and processed foods are GMO
Contrary to popular belief, the vast majority of crop varietals grown in the U.S. are not genetically
modified, Jaffe clarified. Rather, he said, only eight crops in the U.S. are GMO: alfalfa, sugar beet,
corn, soybean, canola, cotton, papaya and squash. In addition, Jaffe dispelled the myth that most
processed foods in the U.S. are GMO because they include oil or sugar
made from GMO crops. He explained that the process of creating oil and sugar breaks down all the
proteins from the plant – including the GMO proteins – so that the end products do not include any of
the original GMO proteins.
Myth 2: Monsanto and other seed developers are the primary beneficiaries of engineered crops
Of course seed developers benefit financially from selling GE crops, but farmers and the environment
also can benefit, Jaffe said. “But there are not direct benefits to consumers,” he acknowledges. Who
benefits from GMOs and how depends on the crop, the GE trait, the agricultural system in which the
crop is planted and the receiving environment, Jaffe said.
Some potential benefits of GE crops with built in pesticides include reduced application of pesticides
from 10 to 12 times a year to one or two times a year on farms that use them, Jaffe said. For farmers
that do not use pesticides, these crops can produce higher yields and generate more income because
fewer crops are lost to pests. Farmers who use herbicide-tolerant crops also are able to reduce tillage
more than farmers of conventional crops, which saves top soil and reduces water runoff into streams,
Jaffe said. But, again, he stressed the benefits are crop and location specific.
Myth 3: Food made with genetically engineered ingredients is harmful to eat
Among the general concerns that people have about GMOs is that introducing a new gene or protein
into a food could trigger allergens in people who consume them, Jaffe said.
“Evidence is overwhelming that there is no harm from foods made from current GE foods. The FDA,
the National Academy of Science and the European Food Safety Authority have all reached the same
conclusion that the GE crops that are here today are safe,” Jaffe said. He also noted that most GMO
crops are not consumed by people, but rather used as animal feed, to create biofuels, make clothes
and create processed foods, which do not include the DNA or protein that was genetically altered. Only
a small amount of GMO food is eaten as whole foods, he said. However, just because the current
crops are safe, does not mean all GE crops in the future will be safe as there is a risk of unintentionally
adding an allergen or toxin, Jaffe acknowledged.
Myth 4: FDA approves GE foods and ingredients before we eat them
“FDA does not do that. The only things that get premarket approval are food additives,” Jaffe said.
However, FDA established a voluntary consultation process at the end of which it either lists its
concerns or it issues a letter noting it has no questions, Jaffe said. During a recent GMO labeling
hearing, an FDA official said all GE companies have complied with the voluntary process and the
agency had not identified any concerns. Many consumers likely would not view a voluntary food safety
process as sufficient, Jaffe said. Indeed, he noted, CSPI supports creating a mandatory pre-market
approval process that will ensure food safety and give consumers confidence in the government’s
oversight and regulation.
Myth 5: Genetically engineered crops are environmentally sustainable
One reasons for genetically engineering crops was to make them resistant to herbicides that could be
more easily applied to kill weeds without harming the crop. However, over the years more weeds have
become resistant to the herbicides, prompting farmers to use different or more herbicides, which has a
greater environmental impact, Jaffe said. The solution, however, is not discontinuing GE crops, but
rather using them and herbicides in a sustainable way, Jaffe said. He recommends mandatory
restrictions on where and how the crops and spray can be used, such as restricting use of glyphosate
in the same field two years in a row. He also advocates requiring weed management plans at the farm
level and offering incentives for integrated weed management. These strategies, combined with
rotation of crops and modes of action, can help GE food be sustainably produced, he said.
http://www.agweek.com/event/article/id/24686/
December 22, 2014, By: Mikkel Pates, AGWEEK.com
US, Mexico reach deal to suspend sugar
antidumping, countervailing duty cases
FARGO, N.D. - The U.S. Department of Commerce has reached an agreement with the Mexican
government and sugar producers to suspend the antidumping and countervailing duty cases against
Mexican sugar imports. The deal is causing cautious optimism among sugar producers and criticism
from sugar users.
American Sugar Association members - a group of processors including cooperatives from the Upper
Midwest - last March filed cases asking the U.S. International Trade Commission and the Department
of Commerce to study whether the Mexican sugar industry was unfairly subsidized, and to take action
to stop its impact on the U.S. market. This agreement settles those cases.
Mexican imports increased sharply in 2013, U.S. sugar prices fell below the loan levels and
cooperatives and other processors forfeited sugar to the U.S. government. Plummeting prices cost
sugar beet farmers in the Red River Valley of North Dakota and Minnesota hundreds of millions in
payment reductions. Farmers in the Southern Minnesota Beet Sugar Cooperative in Renville, Minn.,
Sidney (Mont.) Sugars Inc. and Western Sugar Cooperative in Montana were similarly affected.
Minimum prices
The agreement establishes minimum prices to prevent the suppression of U.S. prices - 26 cents per
pound (dry weight, commercial value) for refined sugar and 22.25 cents per pound for other sugar.
The deal also prevents imports from being concentrated during certain times of the year and limits the
amount of refined sugar that may enter the U.S. market, according to the Department of Commerce.
Paul Piquado, the Department’s assistant secretary for enforcement and compliance, who signed the
agreement for the U.S., said it will "work in concert with the U.S. sugar program" and help promote
stability.
Paul Rutherford, of Euclid, Minn., president of the Red River Valley Sugarbeet Growers Association,
and a grower for American Crystal Sugar Co., said on Dec. 22 ASA members have agreed not to
comment individually, but referred questions to the ASA.
Robert Green, chairman of American Crystal Sugar, also declined to comment.
The ASA issued a statement saying the agreement should stop "Mexico from dumping subsidized
sugar onto the U.S. market and violating trade law.”
ASA spokesman Philip Hayes said, “Like our counterparts in Mexico, we want NAFTA (the North
American Free Trade Agreement) to operate as intended and to foster free and fair trade in sugar
between the countries.”
Hayes also said the agreement won't require changes in the sugar provisions of the 2014 farm bill.
Unwelcome gift
The Coalition for Sugar Reform - a group of 25 organizations - called the deal an "unwelcome holiday
gift for consumers," saying it will raise sugar prices for consumers for the next five years.
The coalition said the agreement will mean any Mexican sugar needed to "adequately supply the U.S.
market must be priced well above world market prices - prices that are even higher than mandated by
the U.S. sugar program."
The Sweetener Users Association - a member of the coalition and an organization that doesn't list its
member companies, who are candy and confectionery makers - said "with the stroke of a pen, these
agreements dismantle the unrestricted free trade of sugar between the United States and Mexico since
2008 and undermine the core principles of the North American Free Trade Agreement. While sugar is
but one commodity traded between our two countries, these suspension agreements set a horrible
precedent by undoing trade flows that have been established over two decades after NAFTA was first
negotiated."
The SUA says the uncertainty surrounding the antidumping and countervailing cases cost U.S.
consumers $837 million between March and September 2014 "and put in jeopardy thousands of U.S.
manufacturing jobs."
Jennifer Cummings, a spokesperson for the SUA, acknowledged the figure is a calculation for extra
costs to the manufacturers of candy and other products, but not necessarily what was paid by
consumers
http://www.reuters.com/article/2014/12/22/usa-sugar-nafta-idUSL1N0U50L020141222
Dec 22, 2014: by Chris Prentice, REUTERS
Sugar buyers' slam NAFTA sugar pact, shift focus to Australia, Canada
Dec 22 (Reuters) - A U.S. sugar buyers’ group has slammed a U.S.-Mexican government pact
announced late on Friday, saying the deal has increased the importance of broadening access to the
domestic market through other trade agreements and the need for greater reform of a government
sugar support program.
The United States and Mexico have signed a deal that will eliminate tariffs on imports of sugar from
Mexico, but establish minimum prices and caps on the amount of different types of sugar that can be
exported.
"With the stroke of a pen, these agreements dismantle the unrestricted free trade of sugar between the
United States and Mexico since 2008 and undermine the core principles of the North American Free
Trade Agreement (NAFTA)," the Sweetener Users Association (SUA) said in an emailed statement on
Saturday.
The agreements will limit supplies of sugar from Mexico, driving up costs for food companies and
consumers, and make it necessary to boost access to the U.S. sugar market to Australia and Canada
through the Trans-Pacific Partnership Agreement, according to the SUA, which represents candy
makers like the Hershey Co. HSY.N and Mars Inc., and other food manufacturers.
The deal curbs the access to the U.S. sugar market Mexico obtained through NAFTA, which was
finalized Friday after changes to a pact that was traded to end a U.S. government investigation into the
dumping of cheap, subsidized sugar from Mexico.
The signed deal raises the price floor for sugar and lowers the proportion of refined sugar that the
country can export to the United States.
The SUA said the agreements move the U.S. sugar program in the "wrong direction." The group has
pushed for an overhaul of the controversial U.S. sugar program that it and other critics say bloat U.S.
prices amid a complicated network of import restrictions and price supports.
http://www.bakingbusiness.com/articles/news_home/Regulatory/2014/12/Cargill_sees_positives_in_prog.aspx?ID={C8DA8
656-0504-4F30-856C-7453F0BECFFB}&e=penner@cass.net&cck=1
12/22/2014 - by Eric Schroeder, bakingBUSINESS.com
Cargill sees positives in progress with Cuba
MINNEAPOLIS — Cargill, which long has been a proponent of ending the embargo and has supported
humanitarian exemptions on food shipments to Cuba, last week expressed support for the White
House’s plan to normalize relations between the United States and Cuba.
“This is an important moment,” said David MacLennan, president and chief executive officer of Cargill.
“The history of trade liberalization has clearly led to economic and social benefits for others.”
Devry Boughner Vorwerk, vice-president of Cargill and chairman of the U.S. Agriculture Coalition for
Cuba, a partnership of more than 20 prominent U.S. agriculture associations committed to normalizing
trade with Cuba, said the move “will drive growth in both countries.”
“It will create a new market for U.S. farmers, ranchers and food companies, and give the Cuban people
improved access to affordable food,” Ms. Vorwerk said.
Cuba is the largest wheat market in the Caribbean, purchasing almost all of its wheat from the
European Union and Canada, according to the National Association of Wheat Growers (NAWG) and
U.S. Wheat Associates (USW). The nation could import at least 500,000 tonnes of wheat from the
United States each year but has not purchased U.S. wheat since 2011.
“U.S. wheat farmers are excited about the prospect of exporting more wheat to Cuba,” said Paul
Penner, president of the NAWG. “NAWG has long supported strengthened trade relations with Cuba
and see this as a historic step in that direction.”
http://www.bloomberg.com/news/2014-12-29/nigeria-may-miss-cocoa-output-target-as-disease-takes-toll.html
Dec 30, 2014: By Tolani Awere, Bloomberg.com
Nigeria May Miss Cocoa Output Target as Disease Takes Toll
Nigeria may miss its cocoa output target of 500,000 metric tons in the 2014-15 season after an
outbreak of fungal blackpod disease devastated farms following heavy rains, a farmers association
said.
“The devastating effect of the excessive rains last August and September is now telling on the overall
tonnage of cocoa beans harvested,” Adeola Adegoke, coordinator of the Cocoa Farmers Association in
the southwestern cocoa-growing Ondo state, said in a phone interview from the city of Akure on Dec.
24. “The season virtually ended in November. There are no more ripe cocoa pods on the trees to
harvest.”
Nigeria, the world’s fourth-largest producer of the chocolate ingredient behind Ivory Coast, Ghana and
Indonesia, set a target to produce at least 500,000 tons of cocoa by the end of the season running
through September 2015 on account on newly maturing trees. The West African nation produced
350,000 tons of cocoa in the 2013-2014 season, according to the Agriculture Ministry. The
International Cocoa Organization assessed Nigeria’s production for that season at 240,000 tons.
Farmers from Nigeria’s southwest region that accounts for two-thirds of the country’s output, are
reporting the absence of the “December cocoa harvest boom” that usually supplies 35 percent to 40
percent of output, according to Adegoke. “We lost this to the heavy rains,” he said.
In the southeastern growing areas around the town of Ikom, which accounts for about 30 percent of
Nigeria’s output, there is less impact of blackpod disease and mold, according to Godwin Ugwu, a
cocoa trader based in the town. The harvest in the region is expected to continue until the middle of
January, he said by phone.
The West African nation’s two cocoa harvests include the main crop from October to December, and
the smaller light crop from April to June. Most of the country’s output is from farmers working on small
plots in the southern cocoa belt.
Cocoa futures in London have advanced 14 percent this year to 1,980 pounds ($3,081) a metric ton.
http://af.reuters.com/article/commoditiesNews/idAFL1N0U815R20141230
Dec 30, 2014: By Luc Cohen, REUTERS
Cocoa butter prices, bean differentials fall to multiyear lows
* Butter ratio at lowest level since 2010
* Ivory Coast cocoa differential at 8-year low
* Ebola prompted chocolate makers to purchase far forward
NEW YORK, Dec 30 (Reuters) - Key physical cocoa market prices have tumbled in recent months to
their lowest level in years, possibly signaling a further decline in benchmark futures following a threeyear rally, industry sources said.
The price of cocoa butter, which gives confectionery its melt-in-the-mouth texture, has fallen to 2.15
times cocoa prices on ICE Futures Europe from 2.65 three months ago, the lowest since 2010, said
Peter Johnson, vice president of New Jersey-based cocoa trader and processor Transmar Group.
In that period, differentials for beans from top grower Ivory Coast have fallen from a 10 pound premium
over London futures to a 100 pound discount, the lowest level since 2006, according to Johnson and
several U.S. industry sources.
They added that the differential for beans from No. 3 grower Indonesia has fallen to $400 under New
York prices from $50 under, a four-year low.
The declines come just months after surging butter ratios and bean prices forced producers to increase
prices and use alternative ingredients.
The price increases have eaten in to consumer demand, and chocolate makers made purchase
commitments well into the future this fall due to worries that Ebola's spread in West Africa, which grows
70 percent of the world's cocoa, could disrupt supply. Both factors are harming demand.
"The cash market is flush with cocoa," Johnson said. "There's no interest in physical cocoa beans
today."
To be sure, supply concerns could support cocoa prices on ICE Futures U.S., as weaker arrivals at
Ivory Coast ports and crop-damaging winds in that country's growing regions could mean lower-thanexpected yields.
But the drop in physical prices is largely driven by expectations of weaker consumer demand in coming
months, as price rises from chocolate makers like Mars and Hershey Co this summer, driven by
soaring cocoa bean futures, begin to take effect.
"We're going to have lower demand than has been expected because of the price increases," one U.S.
industry source said.
Another industry source said the "miserable economy" in Europe is harming chocolate demand in
some of the world's largest per-capita consumers.
In addition, chocolate makers' unusually high levels of forward coverage as a result of Ebola, which
drove cocoa futures to 3-1/2-year highs in late September, are further crimping demand for spot cocoa,
Johnson and another U.S. industry source said.