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October 2019, Volume 25, Number 4

US Ag, Sugar

US farm debt is rising, approaching the level of debt associated with the mid-1980s farm crisis. Farm debt is $425 billion in 2019, up from $325 billion in 2009. Some of the farmers who took on debt when corn and soybean prices were high are having trouble repaying their loans as prices drop.

Most farmers supported President Trump in 2016, but in summer 2019 many expressed frustration that Trump's trade war against China has reduced exports and the prices of soybeans and pork. The US exported farm commodities to China worth $24 billion in 2014, but exports fell to $9 billion in 2018. The Trump administration is providing $28 billion in aid to US farmers because of trade wars.

USDA moved the Economic Research Service and the National Institute of Food and Agriculture from Washington DC to Kansas City effective October 1, 2019. About 80 percent of the 500 staffers who were required to move to Kansas City quit these agencies. Some stayed in the US government by switching agencies.

Sunnyvale-based Bear Flag Robotics makes driverless tractors and other equipment to prepare fields that have been harvested for the next harvest. Bear Flag uses the sensors, lidar, radar and digital video to guide autonomous road vehicles in farm settings.

IBM takes a different approach to technology in agriculture, offering very local weather forecasts via the Weather Company that IBM purchased in 2016. IBM management models provide advice to maximize yields of corn, soybeans, wheat, barley and other crops by adjusting the usage of fertilizer, herbicides, and pesticides on a field-by-field basis. The system works by having farmers take pictures of their crops and sending them via email to the Weather Company.

Sugar. The New York Times published a series of articles in August 2019 called the 1619 Project to mark the 400th anniversary of slavery in what became the US; 20 slaves arrived near Port Comfort, Virginia in August 1619.

Agriculture and slavery were major themes of the stories. Before the Civil War, cotton picked by slaves was the most valuable US export, and the value of slaves exceeded the value of factories and railroads. Some argue that cotton was to the 19th century what oil was to the 20th, a widely traded commodity that made clothing much cheaper.

One story focused on sugar, more typically associated with slavery in the Caribbean and Brazil than the US. Christopher Columbus brought sugar-cane stalks from the Canary Islands to the Caribbean on his second voyage in 1493. Refined sugar was a luxury in Europe, but mass production in Brazil and the Caribbean made sugar accessible to the masses by the 1600s and 1700s.

There was sugar production in Louisiana before the US purchased it from France in 1803 for $15 million, and French sugar planters displaced from Haiti in 1804 soon made Louisiana a center of sugar production. Today, there are 11 sugar mills and 390 cane growers in Louisiana; three of the mills are owned by M.A. Patout and Son, which has been in business since 1825.

The Everglades Agricultural Area made new land available to grow sugar cane in southern Florida. US Sugar, the largest producer, was investigated in 1942 for enticing northern Blacks into debt peonage on its cane farms, charging them for transportation, lodging and equipment to cut cane for $1.80 a day.

World sugar prices fell by half between 2017 to $0.11 a pound in summer 2019. India surpassed Brazil as the world's largest sugar producer in 2018-19, producing 33 million tons, India's third annual 30 million plus ton crop. Lower sugar prices are due to India subsidizing sugar exports to help 35 million sugar cane farmers and low oil prices, since Brazil can switch its cane to producing ethanol when oil prices are high.

The US produces nine million tons of sugar each year, half from cane and half from sugar beets. Another two to three million tons of sugar are imported.

Eggs. There are too many eggs. Cal-Maine Foods based in Jackson, Mississippi, the largest US egg producer with about 10 percent of the 331 million US laying hens, reported that the price per dozen was $0.92 in summer 2019 as the US is expected to produce eight billion eggs in 2019. The leading egg-producing states are Iowa, Indiana and Pennsylvania.

Global. The FAO-OECD released a report in July 2019 that projected farm output to rise faster than demand for food and fiber, putting downward pressure on farm prices. The fastest population growth, in sub-Saharan Africa and South Asia, is where food production is projected to rise slowest. The report predicted more trade in farm commodities to satisfy consumer demand.

OECD-FAO Agricultural Outlook 2019-2028.