Louisiana Sugar Cane Industry Essay

721 words - 3 pages

The intriguing concept of supply and demand in the Louisiana sugar cane industry would be described as resilience. Louisiana’s sugar industry dates back to the turn of the 18th century. How can such a bountiful crop have such a stagnant return? One example of resilience is the sugar factory M.A. Patout and sons. This is the oldest and largest sugar factory in Louisiana that is still family owned and operated. The factory was originally founded in 1825 as a wine vineyard, being later converted to a sugar plantation due to south Louisiana’s subtropical climate. It has seen the rise and fall of sugar prices that have plagued area mills and farmers, forcing many out of business.
According to the article written by Billy Gunn titled, “Sugar Cane Plentiful, but Price Stagnant”, one could see why the price has fallen recently do to the influx of sugar imported from Mexico? The glut of sugar has lowered the price local mills pay to farmers for raw sugar in South Louisiana. “The price now hovers around 21 cents per pound, well below the 27 cents to 34 cents a pound paid to farmers in 2010, 2011 and 2012” (Gunn, 2013). The main reason for the steep price drop is due to millions of tons of sugar imported from Mexico. This began in mid-2012. The U.S Department of Agriculture believed there would be a raw sugar supply shortage, so in April of 2012 they began importing Mexican sugar. Unfortunately the supply of sugar must work through the system before the price rises again.
This however is not the first time of low prices for area farmers. During a five year span in the early to mid 90’s sugar prices plummeted over 50%, from 13.44 to 6.54 cents per pound. According to the Industry and Trade Summary (Sugar) , “ economic turmoil in regions such as Asia, Latin America and Russian caused a sharp decline as well as high over quota tariffs and over capacity due to massive expansion were reasons that led to world sugar market declines” (Boughner, 2001). This led to a break even outcome in the sugar industry. It was not until the end of the...

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