The grass is always greener on the other side of the fence, and the sugar’s always sweeter on the other side of the globe. At least according to critics of the U.S. sugar program.
A recent story in the Wall Street Journal (“US Sugar Soars Above World Prices,” 12/7/14) notes that the price of a pound of sugar in the U.S. is a little less than 9 cents higher than the global price, which PEZ Candy’s CEO says will result in a price hike next year.
However, an important point missing in that comparison is the same point missing in the complaints by brick-and-mortar retailers about the advantage online retailers supposedly have by not collecting state sales taxes on consumer purchases: The cost of delivery.
Indeed, that sugar from Brazil, India and Thailand isn’t going to walk here on its own.
The fact remains that once you factor in shipping costs, that 9-cent difference per pound of sugar narrows considerably. And if – in the interest of global, free-market competition on a level playing field – you remove direct government subsidies and other trade distorting policies from the price of imported sugar, Made in America sugar would actually be a bargain thanks to U.S. efficiency.
It’s also a fact that a pound of sugar today in the U.S. costs about what a pound of sugar cost back during the Reagan administration. Thus, the skyrocketing cost of cookies, cakes and candies must be due to cost factors other than sugar, right?
Interestingly, Wikipedia notes that PEZ candies are manufactured in Austria and the U.S. while the iconic PEZ dispensers themselves are produced in Hungary and China. Now, if the rising cost of a package of PEZ is supposedly due to the high cost of sugar in the U.S., one might ask why, then, are the dispensers – which have nothing whatsoever to do with the cost of sugar – made in China instead of made in America?
We all know the answer: labor costs. Indeed, the rising cost of PEZ in the U.S. over the past couple of decades has little-to-nothing to do with the cost of sugar and everything to do with the cost of government regulations, soaring wages and mandated benefits such as ObamaCare.
All of us would love to see the U.S. federal sugar price-support program go away. But it’s important to our national interest that our sugar industry itself doesn’t end up going away with it.