Next time you’re in the grocery store, look at your cart. The bread, the soda, the cereal, the birthday cake for a loved one—they all have something in common. Buried within their price is a hidden tax, a surcharge that doesn’t go to the government or the grocer, but to a small, powerful group of corporations and cooperatives that control nearly every grain of sugar produced in the United States.
This isn’t a free market at work. It’s the result of the U.S. Sugar Program, a complex web of price supports, market controls, and import barriers deliberately designed to keep domestic sugar prices artificially high. With new farm bill legislation being debated, this system is poised to become even more entrenched, ensuring the profits of this government-sanctioned cartel are protected for years to come—all at your expense.
This is the story of how it works, who benefits, and how they get away with it.
The sugar industry’s primary lobbying arm, the American Sugar Alliance, likes to talk about its “11,000 family sugar farmers.” [1] It’s a comforting image, meant to evoke a picture of small, independent growers who need a federal safety net to survive.
The reality is starkly different.
The American sugar landscape is a duopoly, dominated by a handful of massive players. In the sugarcane fields of Florida, an oligopoly known as “Big Sugar” reigns supreme. At the top sits the U.S. Sugar Corporation, a behemoth farming over 230,000 acres [2] that was granted 22.8% of the entire domestic raw cane sugar market by the federal government for FY2024. [3] Alongside it is Florida Crystals Corporation, a private empire owned by the Fanjul family, which holds a 19.4% share of the market. [3]
Together with the Sugar Cane Growers Cooperative of Florida, these three entities control over 52% of the domestic cane sugar market. [3] The power of Florida Crystals and the Cooperative is magnified by their joint ownership of American Sugar Refining (ASR Group), which operates iconic brands like Domino and C&H and is North America’s largest sugar refiner. [4] This gives them near-total control of the supply chain, from the soil to the supermarket shelf.
Meanwhile, in the nation’s “Sugar Beet Belt,” power is consolidated into massive farmer-owned cooperatives that function like corporate giants. The largest is American Crystal Sugar Company, a cooperative of roughly 2,800 growers that alone controls 35.5% of the entire U.S. beet sugar market. [5][3] Along with a few other major cooperatives like Amalgamated Sugar and Michigan Sugar, they command over 85% of the beet sugar allotments. [3]
The “family farm” narrative is a politically effective shield. The financial benefits of the sugar program don’t flow to thousands of small farmers; they are captured and concentrated by these central corporate and cooperative hubs. The system is designed to enrich them, not a dispersed base of small agriculturalists.
So how does the government guarantee profits for this cartel? The program uses a few key mechanisms, all fortified by impenetrable trade barriers that severely restrict how much cheaper sugar can be imported from the world market.
The result is a staggering price difference paid by every American consumer.
The Price You Pay vs. The World
- U.S. Domestic Price: ~42 cents per pound
- World Market Price: ~20 cents per pound
type: bar
labels: [U.S. Domestic Price, World Market Price]
series:
- title: Price (₵/lb)
data: [42,20]
tension: 0.2
width: 80%
fill: true
yaxislabel: Price per pound
beginAtZero: true
labelColors: true
legend: false
Source: Data based on Sweetener Users Association, 2024. [6]
This price gap is maintained by a system that offers producers a risk-free choice, ensuring they profit no matter what.
The core of the program is a “nonrecourse loan” system. Sugar processors take out government loans using sugar as collateral. After harvest, they face a decision that guarantees them revenue.
graph TD
subgraph "The Sugar Program"
A["<b>Increased Loan Rates</b><br/>Gov't sets a high price floor for sugar"] --> C;
B["<b>Tighter Market Controls</b><br/>Import quotas & marketing allotments limit supply"] --> C;
C["Sugar is Harvested<br/>Producers take out government loans"] --> D{Is U.S. Market Price > Loan Rate?};
D -- "Yes<br/>(Market is Favorable)" --> E["<b>Path 1: Market Sale</b><br/>Producer sells sugar on the open market<br/>and repays the initial government loan."];
D -- "No<br/>(Market Price is Low)" --> F["<b>Path 2: Forfeiture & Subsidy</b><br/>Producer forfeits the sugar to the<br/>government instead of selling at a loss."];
F --> G["Loan is 'repaid' with the sugar collateral."];
G --> H["<b>Taxpayer Cost</b><br/>Government now owns the surplus sugar<br/>and pays the largest producers to store it."];
E --> Z([<b>OUTCOME:<br/>Guaranteed Producer Revenue</b>]);
H --> Z;
end
%% Styling
style A fill:#374151,stroke:#F5B700,stroke-width:2px,color:#FFFFFF
style B fill:#374151,stroke:#F5B700,stroke-width:2px,color:#FFFFFF
style C fill:#1F2937,stroke:#00A6FB,stroke-width:2px,color:#FFFFFF
style D fill:#111827,stroke:#9CA3AF,stroke-width:2px,color:#FFFFFF
style E fill:#104a3e,stroke:#00EBB3,stroke-width:1px,color:#FFFFFF
style F fill:#5a002c,stroke:#DC0073,stroke-width:1px,color:#FFFFFF
style G fill:#5a002c,stroke:#DC0073,stroke-width:1px,color:#FFFFFF
style H fill:#5a002c,stroke:#DC0073,stroke-width:1px,color:#FFFFFF
style Z fill:#111827,stroke:#00EBB3,stroke-width:3px,color:#FFFFFF,font-weight:bold
This system means producers can never lose. The loan rate functions as a guaranteed minimum price. They can either sell for a profit on the market or hand over the collateral to the taxpayer with no penalty. [9] It’s a “heads-I-win, tails-you-lose” proposition, with the American public picking up the tab.
This remarkably durable and lucrative program is no accident. It is the product of one of the most sophisticated and effective political influence operations in Washington.
The sugar industry invests millions annually in lobbying and campaign contributions. The American Crystal Sugar Company PAC and the U.S. Sugar Corp are powerhouses, spending millions each election cycle to secure their interests. [10][11]
- American Crystal Sugar PAC Contributions: ~$2.5 Million (2022 Cycle)
- U.S. Sugar Corp Lobbying: ~$2.1 Million (2022)
type: bar
labels: [American Crystal Sugar PAC Contributions, U.S. Sugar Corp Lobbying]
series:
- title: Millions of USD ($)
data: [2.5, 2.1]
yAxisLabel: 'Millions of USD ($)'
tension: 0.2
width: 80%
labelColors: true
fill: true
beginAtZero: true
legend: false
Source: Data from the Center for Responsive Politics (OpenSecrets.org). [10][11]
Their strategy is transactional and ruthlessly bipartisan. The American Crystal Sugar PAC, for instance, splits its donations almost evenly between Democrats and Republicans. [11] This isn’t about ideology; it’s about ensuring the industry has powerful allies on the key agriculture committees, no matter which party is in charge. The sugar program isn’t a Republican or Democratic policy; it’s a sugar industry policy, defended by a coalition of its beneficiaries.
To seal the deal, the industry aggressively uses the “revolving door,” hiring former top government officials as lobbyists. A 2023 analysis showed that 26 out of 29 registered lobbyists for U.S. Sugar had previously held government jobs. [12] When the former Chairman of the House Agriculture Committee, Collin Peterson, lost his election, he walked straight into a lobbying job for the American Sugar Alliance. [13] This gives the industry unparalleled access and insider knowledge, effectively allowing it to help write its own rules.
The cost of this sweet deal is socialized across the entire economy. It’s paid by American families in the form of higher grocery bills. It’s paid by food and beverage companies, from candy makers to bakers, who are forced to pay inflated prices that put them at a competitive disadvantage. And it’s paid by taxpayers who backstop the entire scheme.
This program is a testament to the enduring power of a special interest to bend public policy for its own private benefit, leaving a bitter taste for everyone else.