Issue #1 January 31, 2013 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Message from Chip Smith, President: Although a brief one, this coming month will be quite busy. Many of you will be attending the International Sweetener Colloquium in Bonita Springs, Fl. Later in the month there is the 2013 USDA Ag Outlook Conference in Arlington, VA. Both of these events should prove to be enlightening in regards to most of the ingredients that we market. Please enjoy the articles attached. As always we do our best to bring you a broad view of our industry through the reporting of a variety of news outlets. Have a great February. Best Regards, Chip Smith, President Also in this issue: (Click on the Headline, or scroll down to the document) 00/00 - Washington Update - Legislative Uncertainty 12/31 - March Cane Crush (Brazil) May See Surplus 01/02 - Coffee in Colombia: Waking Up to an Opportunity 01/07 - (India) Rice exports to fall, wheat exports may double in 2013 01/08 - High beef prices will impact menus in 2013 01/08 - China imports of corn, soybeans to remain high, paper says 01/08 - International Sweetener Colloquium, 10–13 February 2013 01/10 - A Sweet New Year 01/14 - US drought still brings farmers misery 01/15 - Domino Foods, Inc. Named National Strategic Partner of American Diabetes Association 01/15 - Climate change could open new areas to (Austrailian) agriculture 01/16 - USDA turns (sugar) beets into disposable, biodegradable plastic food packaging 01/17 - January issue of the SUGAR AND SWEETENERS OUTLOOK 01/17 - Excess sugar pulls futures down to 29-month lows 01/17 - Congressmen contact energy drink makers directly 01/17 - China's grain imports from January-November 2012 soared 294.5% 01/18 - U.S. soybean export sales hit marketing year high 01/21 - Q4 North American Cocoa Grind Succeeds Estimates 01/21 - 'ASR Group' Name Unites Leading Sugar Brands Under One Identity 01/22 - Early Focus on the Prospective Size of the 2013 U.S. Corn Crop 01/23 - Soybeans, Corn to be impacted by dry weather in Argentina Brazil 01/24 - Sugar Rush Leaves U.S. With Biggest Glut in Decade 01/29 - Increasing demand seen for pea protein 01/31 - Iconic Imperial Sugar Company CEO Robert Hanna passes away A Glance at the Past . Legislative Uncertainty Needless to say, a great deal of uncertainty has revolved around the farm bill for the past year. At a Sugar Club dinner last March, Mary Kay Thatcher said that the Congress would have a very difficult time trying to get the bill done. Ms. Thatcher, an official at the American Farm Bureau Federation, was right on target. Although the Senate passed a bill last June and the House Agriculture Committee reported one in July, the bill never made its way to the House floor, primarily because of pressure to reduce spending for nutrition programs. At the last minute, the existing bill was extended through this coming September 30. The general feeling at the moment is that the bill will not be re-considered until April at the earliest. There are more pressing issues on the Congressional agenda. Although the delay is frustrating farm groups, there’s nothing unusual about it. The 2002 bill had to be extended four times before it was finally adopted. Nonetheless, the delay has triggered some concern among farm groups, including those in the sugar sector. Those concerns pale, however, in comparison to those that prevailed way back in 1974 when the old Sugar Act failed to be extended. th On June 5 of that year, the sugar lobby sat in the gallery of the House of Representatives in a state of total shock and disbelief. We had just witnessed the Sugar Act, which had been in force since 1934, go up in flames. There were no warning signs. Two amendments to the bill, which the Rules Committee cleared for consideration, had passed with little opposition. (Oddly enough, the bill normally went to the House floor under what is called a “close rule.” No amendments could be offered on the House floor, a procedure normally reserved for appropriations bills.) The extension of the Act was defeated on the House floor by a vote of 175 to 209. As a result, the Act, which included domestic and foreign quotas, allotments, acreage restrictions, payments, minimum wages for farm labor, marketing allotments and import quotas, expired at the end of the year. On June 30, 1975, the Federal excise tax on sugar of one-half cent per pound also expired. That tax was used to finance the so-called “conditional payments” that were made to producers for complying with acreage restrictions. Those payments were unique in that they were graduated. The more sugar you produced the smaller the payment per ton of sugar produced. Prospects for renewing the bill at that time had been hampered by exceptionally high sugar prices (the price of raw sugar had doubled from around 13 cents a pound in January of that year to over 26 cents by the time the bill was considered by the House. By November it had gone up to around 60 cents a pound.) There also was a great deal of unfavorable publicity surrounding lobbying activities for foreign nations. Talk of trying to extend the sugar program for one year or include its provisions in a pending trade bill never materialized. The Ford Administration did, however, take control of the situation. In order to protect the sugar industry from a flood of imported sugar, President Ford signed a proclamation on November 16, 1974 that imposed an annual global import quota of 7,000,000 short tons, raw value. By so doing, the import duty remained at .625 cent a pound. In the absence of a quota the duty would have tripled. Despite producer concerns, over the next five years sugar imports never came anywhere near seven million tons. And there was no drastic decline in domestic production. (The industry wasn’t really impacted until HFCS arrived on the scene.) Two attempts by the producers to resurrect the sugar act failed, one in 1978 and the other in 1979. As time went on, the Administration provided relief for the industry through import duties and fees and finally re-imposed country-by country import quotas. And sugar provisions were included in the 1977 farm bill and all subsequent farm bills. Today, should Congress fail to extend the farm bill, which is highly unlikely, USDA certainly has the flexibility to provide for the farm sector through other statutes. So, those that are anxious about the farm bill should “keep calm and carry on.” http://www.candyandsnacktoday.com/archives/2012/12/march-cane-crush-may-see-surplus.shtml December 31, 2012; March Cane Crush May See Surplus Cleveland —The 2012/2013 sugarcane crush in Brazil’s South-Central region is expected to total 2.6 percent more than September estimates, according to the Brazilian Sugarcane Industry Association, Unica. Unica anticipates 532 million tons in March 2013 instead of its original forecast of 518.5 million tons. Dry November weather in the region, where 90 percent of the country's sugarcane is produced, allowed the harvest to advance quickly, explains Technical Director Antonio de Padua Rodrigues. Growth in cane production is predicted to result in high volumes of ethanol and sugar. Sugar is projected at 34.05 million tons, a 4.13 percent increase from Unica's September numbers, and ethanol is expected to reach 21.33 billion tons — 6.63 percent higher than the previous estimate. Rabobank Food and Agribusiness Research also expects a global sugar surplus in 2012/2013 and says the market is feeling the effects, bringing New York Sugar No. 11 futures down to 19 to 22 cents per pound throughout the past four months. According to Rabobank, sugar prices slipped below their anhydrous ethanol equivalent price on December 10, breaching the ethanol floor. Anhydrous ethanol exports are up 300 percent from the previous year’s shipments, resulting in a 73 percent increase in total ethanol exports from South- Central Brazil. “Meanwhile there continues to be discussion of an increase in Brazilian gasoline prices,” says Andy Duff, Rabobank analyst. “The effective increase in the ceiling price for hydrous ethanol that would result from an official gasoline price hike would be supportive for sugar.” http://knowledge.wharton.upenn.edu/article.cfm?articleid=3151 January 02, 2013 in Knowledge@Wharton Coffee in Colombia: Waking Up to an Opportunity Every day, more than 500,000 coffee growers throughout Colombia fulfill a family tradition, one that has been passed down from generation to generation. Growing premium-quality coffee beans across nearly 2.2 million acres of Colombian highlands is an important part of their heritage. For Colombians, coffee is not merely a bean, but a part of their national identity. In fact, coffee growing is the largest source of rural employment in the country. The centrality of coffee to Colombian society and to its international image is exemplified by the nation's president, Juan Manuel Santos, who spent much of his career representing the Colombian Coffee Growers Federation (FNC) at the International Coffee Organization. Colombians pride themselves on their reputation for high-quality coffee beans, which result from rich volcanic soil and predominantly shade-grown cultivation. In addition, the alternation of wet and dry seasons supports two harvests, one running from September to December and the other running from April to June. Coffee is grown in the highlands of the Sierra Nevada of Santa Marta as well as on the slopes of the three sections of the Andes mountains that traverse the country.