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Are consumers souring on sugar? Perhaps so. One bit of evidence came from New York Jets edge rusher Jermaine Johnson. In preparing to face the Baltimore Ravens, the rusher said he had been “staying off sugary drinks and stuff like that” to better prepare to face Ravens quarterback Lamar Jackson. Robert Johansson, director of economics and policy analysis for the American Sugar Alliance, has seen similar sentiment in consumers. “Consumers were starting to buy less food at the grocery store, so manufacturing companies needed less sugar,” said Johansson. Inflation is one culprit. Higher prices have resulted in less consumer spending on candy and sweets. Another is the rising popularity of GLP-1 weight loss drugs. Between 9-12% of Americans are taking the drugs. As a result, these consumers are spending 6% less on candy and chocolate, and 10% less on sweet bakery items. The declining demand is captured in the latest USDA usage projections. The agency projected sugar use for food in crop year 2025-26 will be 11.96 million tons, 0.7% below last year and 3.7% below 2023-24. At the same time sugar production has increased. The USDA projects this year’s production at a record 9.47 million tons, up 1.8%. The ending stocks-to-use ratio for 2025-26 is forecast at 16.2%, down from 19.8% in 2024-2025, but still high. Food Business News says the USDA’s “target” ratio ranges from 13.5-15.5%, with the lower end considered an adequate supply and the upper end on the verge of oversupply. The oversupply has led to lower sugar prices. During late spring and early summer, Midwest beet sugar values ranged from $0.38-$0.41/pound, down roughly a third from a year ago. Recent USDA figures showed prices averaged $0.36/pound in the third quarter.
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Figure 1. Average Annual Price for Bulk Beet Sugar |
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*Average Price for 3rd Quarter, 2025 Source: USDA Economic Research Service |
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Approximately 54% of U.S. sugar production comes from sugar beets. Sugar beet growers in Nebraska typically plant 44,000-48,000 acres annually and produce 1.0-1.4 million tons. Sugar beet production and processing are important to agriculture and the economy in the Panhandle. Input costs to raise sugar beets have increased in recent years. American Ag Credit estimates the cost of growing sugar beets hit a record high this year, up nearly 40% since 2020. Thus, beet producers, like other crop producers, are experiencing a financial squeeze. Unfortunately, the outlook doesn’t suggest a change anytime soon. |
