GM Beet Ban May Curtail U.S. Sugar Production

The amount of sugar produced in the United States may fall about 20% next year if a ruling by a federal court banning the planting of genetically modified sugar beets stands, according to a USDA economist.

In August, a judge in U.S. District Court for the Northern District of California ruled against USDAs approval of the genetically modified seeds, saying there was insufficient research into the environmental impact. A ban would force farmers to plant conventional sugar beets in 2011. However, traditional sugar-beet seeds might be in short supply, because many seed producers had switched to genetically modified varieties due to the demand from farmers.

In an analysis made for the case challenging the ban, USDA economist Daniel Colacicco wrote: The limited availability of conventional seed will severely restrict plantings of sugar beets in 2011. He called the impact of a smaller beet-sugar supply severe, although it might be affected by sugar imports and substitution of other sweeteners.

According to Colacicco, this GM beet ban could cut 1.6 million tons from next year's sugar-beet crop, down from the current government forecast of 8.1 million tons. Beets currently provide between approximately half of domestically produced sugar and genetically modified beets make up about 95% of the total beets planted.

According to The Wall Street Journal, supermarkets and retailers will likely bear the biggest burden if a sugar shortage occurs in 2012 due to the ban on GM beets. Large food and beverage companies would probably outbid retail outlets for the reduced supply. The price of sugar has been rising globally due to increased demand, a market shift away from high fructose corn syrup (HFCS) and concerns about diminishing supplies, especially from Brazil.