| So far, sugar cane farmers have reason to be optimistic that
this year will bring in more money than the last.
An early January freeze in Florida, where the sugar cane harvest lasts
until March and a dip in production in the just-finished Louisiana harvest
have helped boost raw sugar prices above 21 cents a pound.
The recent rise is good news for farmers who endured prices of 17 cents
a pound last summer, the worst in 22 years.
But whether the spike in prices will last remains in doubt.
``The U.S. Department of Agriculture is predicting that the price may
weaken again in the coming months due to several factors,'' said Mike
Salassi, a sugar cane analyst at Louisiana State University.
Sugar cane is a $350 million-a-year industry in Louisiana, but growers
face increasing competition from sugar beet farming in the Midwest and
molasses with high sugar content imported from Canada.
Total production in the state should reach 1.57 million tons of raw
sugar this year, officials said, down from 1.68 million tons a year ago.
Damage from Florida's early January freeze hasn't been fully determined
yet, but officials there said temperatures in the 20s on New Year's Eve
and again on Jan. 5 were the worst dips in temperature in 10 years.
Any significant damage could eat into Florida's projected harvest of
16.4 million net tons of cane, which would be the highest in the nation.
Louisiana farmers are already making plans for the next growing season.
Salassi said he expects sugar cane acreage in the state to remain
relatively stable at around 490,000 acres next year, tops in the nation.
In recent years, many rice farmers in southwest Louisiana have switched
from rice to sugar cane, thinking cane was more likely to deliver profits.
Salassi said uncertainty over sugar prices will probably stop more of them
from making the switch this year.
Historically, import quotas on foreign sugar and other controls kept
sugar prices relatively stable, making sugar cane farming a little more
reliable than the boom-and-bust cycle faced by many other crops.
That has been changing as the U.S. government strikes free trade
agreements with more nations and domestic sugar supplies increase.
U.S. sugar cane acreage has jumped from 913,000 acres in 1993 to
roughly 1 million. Almost half of that is in Louisiana. Florida is a close
second.
Sugar beet farming has ballooned in the Midwest, mainly in Minnesota
and North Dakota, reaching 1.5 million acres in 1999.
``I wouldn't expect acreage to drop a whole lot,'' Salassi said.
``Sugar cane is a perennial crop. Farmers get three, four or more years
off the same crop. They don't switch from year to year.''
Farmers will still have to keep a sharp eye on U.S. agricultural
policy, Salassi said.
Federal officials bought thousands of tons of sugar on the open market
last year, and government stockpiles are high entering the year.
``If the government releases its sugar inventory into the market, that
could certainly hurt the rebound in prices,'' he said. |