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article imageUSDA weighs sugar bailout that may boost candy prices

By Owen Weldon     Mar 13, 2013 in Food
In the US, the USDA is considering buying around 400,000 tons of sugar in order to limit supply and boost prices so sugar producers can pay back loans, which they are in danger of defaulting on, to the government.
According to Huffington Post, the move would be an exercise of an untested provision that was inserted in the farm bill back in 2008, called the Feedstock Flexibility Program. The program allows the USDA to intervene in the market to raise prices.
According to Wall Street Journal, the USDA did not say how many companies they have loaned money to, nor did they name them. However, American Crystal and Amalgamated did not comment when Wall Street Journal contacted them and U.S. Sugar said that they do not have an outstanding loans with the USDA.
Food companies would be hit by higher prices, and this includes some major names in the candy industry including Nestle, Mars and even Hershey Co.. This could also end up boost retail food prices.
According to Daily Finance, An industry trade group said that sugar subsidies jeopardizes lots of jobs as well as hurt consumers.
As of now the USDA has not said when or if they will intervene in the market.
More about USDA, Bailout, Sugar, sugar bailout, Prices
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