Sugar, you might think, is just sugar, no matter where it comes from. But not anymore.
About half of all sugar in the U.S. comes from sugar beets, and the other half comes from sugar cane. Now, for the first time, sugar traders are treating these as two different commodities, with two different prices.
It's all because about eight years ago, nearly all the farmers who grow sugar beets in the United States decided to start growing genetically modified versions of their crop. The GMO beets, which can tolerate the weedkiller glyphosate, otherwise known as Roundup, made it easier for them to get rid of weeds.
They really didn't expect any problems.
I interviewed David Berg, president of the American Crystal Sugar Co., about this change in 2008. "Most of our buyers, the people who buy sugar for industrial uses — as an ingredient in cereals and candies and baked goods and things like that — they've not expressed big concerns about it," Berg said. "We have not come across any specific place where we're under any constraints where we can't sell our sugar."
Just in the past two years, though, that's changed. Many food companies have decided to label their products as non-GMO. And because practically all sugar beets in the U.S. are genetically modified, those food products are now using sugar derived from sugar cane grown in Florida, Louisiana or outside the U.S. There isn't any genetically modified sugar cane.
Deborah Arcoleo, director of product transparency at the Hershey Co., told me that in 2015, "we started reformulating Hershey's Kisses, Hershey's milk chocolate, and Hershey's milk chocolate with almonds, to move from beet sugar to cane sugar, and that's complete. Now we're looking to do that across the rest of our portfolio, to the extent that we can."
Hershey's is one of the top sugar users in the country, and other companies have made similar moves. It's been a jolt for American Crystal, which is mainly in the sugar beet business.
American Crystal is a cooperative, owned by sugar beet farmers like Andrew Beyer, from Kent, Minn. Beyer went to the company's annual meeting earlier this year and was shocked to hear just how many of American Crystal's customers — those pastry and chocolate companies — were moving away from sugar beets. "They were talking like a third or up to half of them were converting their systems to strictly non-GMO," Beyer says.
The result has been a remarkable change in the American sugar market. Slowly, but consistently, a gap has opened up between the price of sugar from cane and sugar from beets.
"The current price for beet sugar is about 3 to 5 cents below the price for cane sugar on the spot market," says Michael McConnell, an economist with the U.S. Department of Agriculture's Economic Research Service.
It means that buyers are paying 10 to 15 percent more for cane sugar.
Meanwhile, the amount of beet sugar looking for buyers has been increasing, while there's a shortage of cane sugar. That shortage is bad enough that sugar users, such as candy companies, are asking the USDA to allow more imports of cane sugar to ease the shortage.
Beyer says that he and his fellow sugar beet farmers are thinking about going back to growing non-GMO beets.
They couldn't do it quickly; right now, there aren't enough non-GMO seeds to go around. And they would prefer not to do it.
Planting genetically modified sugar beets allows them to kill their weeds with fewer chemicals. Beyer says he sprays Roundup just a few times during the growing season, plus one application of another chemical to kill off any Roundup-resistant weeds.
He says that planting non-GMO beets would mean going back to what they used to do, spraying their crop every 10 days or so with a "witches brew" of five or six different weedkillers.
"The chemicals we used to put on the beets in [those] days were so much harsher for the guy applying them and for the environment," he says. "To me, it's insane to think that a non-GMO beet is going to be better for the environment, the world, or the consumer."
But Beyer says he'll do it if he needs to. He'll do what his customers want.
ARI SHAPIRO, HOST:
Candy makers seem to want their products to be sweet and also clean and green. Some have decided to stop buying genetically modified ingredients like sugar because many consumers don't trust GMOs. This is causing an unprecedented shift in the market for sugar. Sugar beet farmers are having trouble selling their product. NPR's Dan Charles has the story.
DAN CHARLES, BYLINE: Traditionally, about half of the sweetness in your pastries and chocolate came from a beet, a sugar beet. And about eight years ago, nearly all the farmers who grow those beets decided to shift over to genetically modified beets that made it easier for them to get rid of their weeds. They really did not expect any problems. Here's David Berg, president of the American Crystal Sugar Company in Moorhead, Minn., talking about that change back in 2008.
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DAVID BERG: Most of our buyers - the people who buy the sugar for industrial uses as an ingredient in cereals and candies and baked goods and things like that - they've not expressed great concerns about it. We have not come across any specific place where we're under any restraints that we can't see our sugar.
CHARLES: But just in the past two years, things have really changed. More and more food companies have decided to label their products as non-GMO, and because practically all sugar beets in the U.S. are now genetically modified, those companies now need to get their sugar from the farmers who grow sugarcane in Florida, Louisiana or outside the U.S. There isn't any genetically modified sugarcane. Deborah Arcoleo is director of product transparency at The Hershey Company.
DEBORAH ARCOLEO: We started reformulating Hershey's Kisses, Hershey's Milk Chocolate and Hershey's Milk Chocolate with Almonds to move from beet sugar to cane sugar. And that's complete, and now we're looking to do that across the rest of our portfolio to the extent that we can.
CHARLES: That has been a jolt for the American Crystal Sugar Company in Minnesota. It's mainly a sugar beet operation. Andrew Beyer, who grows sugar beets near Kent, Minn., went to the company's annual meeting earlier this year and was shocked to hear just how many of American Crystal's customers - those pastry and chocolate companies - are now moving away from sugar beets.
ANDREW BEYER: They were talking, like, a third or up to a half of them were converting their systems to strictly non-GMO.
CHARLES: What was the reaction you heard among the farmers when you hear this?
BEYER: Pretty concerned about it.
CHARLES: Because the result has been a remarkable change in the American sugar market. Sugar used to be just sugar wherever it came from. But Michael McConnell, an economist with the U.S. Department of Agriculture, says sugar traders are increasingly treating bulk cane sugar and beet sugar as two different commodities with different prices.
MICHAEL MCCONNELL: The current price for beet sugar is about three to five cents below the price for cane sugar right now on the spot market.
CHARLES: That means buyers are paying 10 to 15 percent more for cane sugar. There's a pile of beet sugar still looking for buyers while there's actually a shortage of cane sugar. It's so bad that cane sugar users like candy companies are asking the USDA to allow more foreign cane sugar into the country.
Andrew Beyer says sugar beet farmers like him are thinking about going back to growing non-GMO beets. They couldn't do it quickly. Right now there's not enough non-GMO seed to go around, and they really would prefer not to do it.
Right now with sugar beets that have been genetically modified to tolerate the herbicide Roundup, farmers can kill their weeds by spraying Roundup just a few times each summer. Going back to conventional varieties would mean going back to spraying their crop every 10 days or so with what Andrew Beyer calls a witch's brew of five or six different weed killers.
BEYER: The chemicals we used to put on the beets in conventional days were so much harsher for the guy applying them and the environment. You know, to me, it's insane to think that a non-GMO beet is going to be better for the environment, the world or the consumer.
CHARLES: But he says we'll do it if we have to. We'll do what our customers want. Dan Charles, NPR News. Transcript provided by NPR, Copyright NPR.