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  • Sugar Market Outlook

    Sugar Market Outlook

    The USDA released its first supply and use estimates for 2026/27 on May 12th.  For 2026/27, USDA estimates that domestic beet and cane sugar production will total 8.810 million short tons, raw value (STRV). If realized, this nearly 5% reduction would be the lowest domestic production level in more than a half decade (Figure 1). The June WASDE report will reflect the first yield/production survey forecasts for 2026/27, with some in the industry expecting the estimate to be up from the May report. 

    Beet sugar production (~55% of U.S. sugar production) is estimated to reach 4.722 million STRV, its lowest level since the freeze-damaged crop of 2019/20. This represents a year-over-year decrease of 300,000 STRV due to a reduction in planted beet area and lower yields based on delays in springtime planting across the entire beet-production region. 

    Cane sugar production is expected to total 4.088 million STRV, which, like beet sugar, would amount to its lowest output since 2022/23.  This represents a year-over-year decrease of 130,000 STRV. While Louisiana’s cane sugar crop is forecasted at 2.146 million STRV, down 86,000 year-over-year, production in the state is still expected to continue the trend of expanding acres. Yields are expected to track the five-year average following last year’s record yields and sugar recovery rate. Florida’s cane sugar production is forecast at 1.942 million STRV, a yearly decrease of 44,000 STRV as the February freeze inhibited early growth on sugarcane planted the preceding fall.  

    Figure 1. Historical U.S. sugar production (1,000 STRV). USDA-ERS. 

    Imports for 2026/27 are initially estimated at 3.260 million STRV, which equates to a 23% increase from the year prior. This threshold is the result of minimum commitment levels of World Trade Organization (WTO) raw sugar tariff-rate quotas (TRQs) of 1.137 million STRV, WTO refined sugar quotas of 24,251 STRV, free trade agreement (FTA) TRQs of 260,777 STRV, and imports from Mexico. Based on calculations as stipulated in the 2014 U.S.-Mexico Suspension Agreements, U.S. imports from Mexico currently are estimated at 1.046 million STRV. This would be an increase from the 220,000 STRV supplied by Mexico last year and double the 504,000 STRV imported in 2024/25. Based on the stocks-to-use ratio, the Suspension Agreements with Mexico will determine the quota for Mexico in July, September, December, and March.  High-tier duty sugar (refined and specialty refined) imports are initially set at 466,000 STRV. USDA sets 2026/27 high-tier raw sugar imports initially at zero.  As high-tier raw sugar imports are observed entering U.S. ports, they will then be reflected in the balance sheet. For 2025/26, a total of 299,000 STRV of high-tier raw sugar imports have entered the country as of the May WASDE with another 100,000 STRV expected in the second half of the fiscal year (Figures 2 and 3). The amount of high-tier imports landed will have a proportional impact on the import quota from Mexico. As the amount of high-tier imports is increased, the import quota level from Mexico is reduced. 

    Figure 2. Estimated U.S. sugar imports (1,000 STRV) for 2026/27. USDA ERS. 

    Figure 3. Historical U.S. sugar imports, by source. USDA ERS. 

    There is uncertainty with U.S. sugar demand as inflationary pressures, an overall reduction in food and beverage consumption (due to the adoption of glucagon-like peptide-1 drugs (GLP-1)), and changes in food consumption recommendations weigh on the market. The demand estimate of 12.259 million STRV is unchanged from the prior year’s estimate. However, there is a declining multi-year trend in sugar for food consumption from the high reached in 2022/23 (12.473 M STRV). 

    Looking to the global sugar market, for the 2025/26 crop year, the International Sugar Organization (ISO) raised its forecast for the 2025/26 global sugar surplus volume thus indicating an adequately supplied market. As such, the #11 world raw sugar futures price has declined from a high of 27.31 cents per pound in November 2025 to 14.05 cents per pound in April 2026. 

    Domestically, the U.S. #16 raw sugar futures contract has averaged 32.97 cents per pound from January to April. The Midwest refined beet spot price has averaged 41.67 cents per pound over the same period. Although the #16 raw sugar price has declined since last September to end the fiscal year prior, a record cane harvest in Louisiana acted to moderate prices. Coupled with flat U.S. sugar demand, #16 raw futures decreased from 36.06 cents per pound in September 2025 to a low of 32.14 in February 2026. However, raw sugar prices have begun to increase to 34.81 cents per pound in April. Midwest refined beet spot prices have also moderated since September (38 cents) to 42.00 cents per pound in April. The anticipation of reduced domestic sugar production is seen as supportive for U.S. prices (Figure 4). 

    Figure 4. Midwest refined beet sport price, #16 U.S. raw sugar futures price, and #11 world raw sugar futures price, January 2024 to April 2026. USDA ERS. 

    Prior to the Middle East conflict that began in March, world raw sugar prices were already starting a downward trend, settling under 15 cents per pound. While other commodities like corn, soybeans, and cotton have showed gains resulting from the conflict amid the rally in crude oil prices and shipping disruptions through the Strait of Hormuz, world raw sugar prices continued to be suppressed from the available surplus. However, the #11 futures market was not entirely absent of gains as resulting support from the energy complex provided spillover support to prices. Sustaining that support has been challenging. U.S. sugar producers are not immune from the challenges faced by other agriculture producers such as rising input costs and falling commodity prices. While pressure continues to mount for the industry, USDA announced $150 million in assistance to sugar beet and sugarcane producers in response to temporary market disruptions and increased production and processing costs. This assistance was designed to ensure producers have the financial stability needed to continue operations and plan for the upcoming crop year.

    Looking forward to 2026/27, the ISO forecasts a deficit of global sugar due to potential impacts on sugar cane crops from a developing El Niño weather system and the expectation that more sugar cane crush will be diverted into ethanol production away from sugar production (which should raise the #11 world raw price). As the #11 world raw price increases, the U.S. #16 futures will tend to follow suit. 

    Deliberto, Michael. “Sugar Market Outlook.“ Southern Ag Today 6(24.3). June 10, 2026. Permalink

  • U.S. Meat Production and Consumption Patterns

    U.S. Meat Production and Consumption Patterns

    Heading into grilling season, it is interesting to look at the shares of meat production and consumption in the U.S. One fact that may surprise, the United States now produces more pork than beef, yet Americans still eat more beef per person.

    The USDA ERS May 2026 Livestock, Dairy, and Poultry Outlook projects 2026 pork production near 28 billion pounds against 25.5 billion pounds of beef. The gap reflects a shrinking cattle herd while hog supplies remain ample. ERS projects the gap to widen further in 2027. Broiler chicken production is projected at 49 billion pounds. 

    Production is not the same as consumption. ERS projects 2026 per capita availability at 60 pounds of beef and 49.6 pounds of pork, with chicken far ahead at 105.6 pounds. Total red meat and poultry disappearance per capita is projected to top 230 pounds in 2026 which would be the highest on record. 

    So why does beef lead pork at the dinner table when we raise more hogs? Trade. The U.S. is expected to export roughly a quarter of its pork production but only about 9 percent of beef production. Additionally, beef imports outweigh exports and will add more beef to consumers plates. 

    Looking at price changes adds important context. The all-fresh retail beef value hit a record high $9.64 per pound in April, up 13% from a year earlier. Retail pork prices were essentially flat at $4.89 per pound and retail broiler prices declined slightly to $2.39 per pound. Despite the highest price tag, beef demand has stayed firm as consumers are paying more and still reaching for it.

    Production volume and consumer demand are different signals, and it will be important to track both over the next few years. Across proteins, it appears there will be lots of meat on grills this summer.

    Maples, Josh. U.S. Meat Production and Consumption Patterns. Southern Ag Today 6(24.2). June 9, 2026. Permalink

  • Is There a Future for Tobacco Farming?

    Is There a Future for Tobacco Farming?

    Authors: Jeffrey H. Dorfman, Blake Hoarty, and Younghyeon Jeon, North Carolina State University

    As previously reported here, both the number of tobacco farms and the acres planted have been in sharp decline in the United States, with farms down by 95 percent and acreage down 51 percent in the twenty years from 2002 to 2022 (Snell, 2024). Over half of the remaining tobacco farms and an even larger share of tobacco acres are in either Kentucky or North Carolina. A new survey of tobacco growers in North Carolina suggests some uncertainty over the survival of the crop in the U.S.

    We surveyed tobacco farmers in North Carolina in December 2025 and January 2026 by emailing all of them a link to an online survey as well as using county agents to remind them to complete the survey. Responses from 114 producers give us a detailed current picture of tobacco growers.

    The average acres of tobacco grown in North Carolina is 254 acres, and the median acres is 180. Only about 20 percent of growers report their average acres of tobacco as being less than 100 acres. There are very few “small” tobacco farmers left in North Carolina, particularly when you consider that the average total acres farmed by our respondents is 1,883. In North Carolina, tobacco is most often a high-return part of a large-scale diversified farm. This is further confirmed by the fact that over half the respondents report income above $250,000 per year, and we find the median number of commodities grown on these farms is four. The most common other crops are soybeans, corn, wheat, other vegetables, sweet potatoes, and cotton.

    The average tobacco farmer in North Carolina reports a breakeven price of $2.24 per pound and a desired profit-goal price of $2.63 per pound. Market prices over the last few years have generally produced profits above breakeven, but meeting profit goals at $2.63 has been less common.  

    However, the troubling part of the survey is the answers to a question about “how many more years do you expect to grow tobacco?” Almost 50 percent of growers choose “1-5 more years,” and only 30 percent selected “11 or more years.” Only about four percent of farmers reported a breakeven price above common market prices, so farmers are not planning to exit due to unprofitable conditions. Instead, the more likely explanation is uncertainty surrounding the long-term future of tobacco production. Ongoing FDA tobacco regulatory proposals, potential restrictions on tobacco products, rising labor costs and hassles, and continued declines in domestic cigarette consumption may discourage growers from making long-term investments. As a result, when a farmer needs to replace their curing barns, they decide it is not worth the additional investment given they are not sure how many more years tobacco will remain a viable crop.

    These survey results suggest that if cigarette manufacturers want to continue to have access to high quality American tobacco, they need to figure out a way to make further investment in modern infrastructure a choice farmers feel comfortable making. Without some movement on this front, it is likely that domestic tobacco production will look much different in the next ten to twenty years.

    Figure 1. Expected Years of Continued Tobacco Farming

    Figure 2. Histogram of Breakeven Prices Reported by NC Tobacco Farmers

    References

    Snell, Will. “Census Reveals Tobacco Farms Disappearing from Southern Agriculture.” Southern Ag Today 4(13.3). March 27, 2024.

    Dorfman, Jeffery H., Blake Hoarty, and Younghyeon Jeon. “Is There a Future for Tobacco Farming?” Southern Ag Today 6(24.1). June 8, 2026. Permalink

  • Settlement Approved in Right to Repair Litigation

    Settlement Approved in Right to Repair Litigation

    On May 18, the Federal District Court for the Northern District of Illinois preliminarily approved John Deere’s settlement of the In re: Deere & Company Repair Services Antitrust Litigation MDL No. 3030, Case No. 3:22-cv-50188 class action lawsuit. The agreement settles the lawsuit – launched in 2022 ultimately reaching 200,000 plaintiffs – for $99 million. John Deere bears no admission of wrongdoing in the settlement agreement. For a more detailed treatment of the lawsuit and underlying issues, see this article by the National Agricultural Law Center.

    “Right to Repair” is the term used by purchasers of farm equipment who are prohibited by the purchase license to do their own or hire third party repair services not authorized by the manufacturer. Major manufacturers of farm equipment – including CNH Industrial (Case IH and New Holland), AGCO (Massey Ferguson, Fendt, and Challenger), and New Holland, as well as John Deere – have had various forms of this restriction, which have been relaxed somewhat by agreements with the American Farm Bureau Federation. 

    Deere and other companies have pointed to four primary justifications for the limitations: emissions compliance under the Clean Air Act, operator safety and liability, protection of investment in intellectual property, and cybersecurity and data privacy. Manufacturers argue that third party repair could lead to bypass of emissions control, safety, and data systems.

    The farmers’ argument is straightforward: when a machine breaks down, the time lost waiting for an authorized company repair could be devastating, particularly during narrow planting, application, and harvest windows in relatively remote farming areas. Farmer plaintiffs also argue that the restrictions create an expensive after-purchase repair monopoly. Plaintiffs in the John Deere suit alleged overcharge for repair services.

    The agreement validates John Deere’s safety and intellectual property concerns, and distinguishes between repairing a machine (allowed) and modifying its core code to change factory performance (which remains restricted). Deere has also agreed to provide diagnostic tools over a 10-year period.

    Eligibility for compensation requires having owned or leased  John Deere Large Ag Equipment (all 6000, 7000, 8000, and 9000 Series models of tractors, combines, and harvesters, etc.) and having paid an authorized dealer for repair services between January 10, 2018, and May 2026.

    John Deere has granted access to its internal billing database to the settlement administrator, and an outreach campaign is imminent. Notice recipients have until September 15, 2026 to opt out of the settlement to pursue their own claims and a deadline to file claims forms by October 15, 2026. Notice recipients will likely receive pre-filled notices of potential claims with instructions on substantiation, which will likely include itemized dealer service invoices (breaking out labor rates and parts), proof of payment and the Product Identification Numbers (PIN) or serial numbers for each piece of equipment serviced. 

    A claim portal – www.DeereRepairSettlement.com – has been established but will go live over the summer. Updates on the settlement can be found at this page from ClassAction.org.

    Brannan, Andrew. “Settlement Approved in Right to Repair Litigation.” Southern Ag Today 6(23.5). June 5, 2026. Permalink

  • Trade Trends Show a Greater Adverse Impact on Southern Agriculture Compared to Other U.S. Regions

    Trade Trends Show a Greater Adverse Impact on Southern Agriculture Compared to Other U.S. Regions

    Since the colonial days, trade has been vitally important for Southern agriculture.  Historical records reveal that agricultural products accounted for 60-75% of Southern exports leading up to the American Revolution. In more recent times, USDA Economic Research Service trade data indicates that, despite recent trade challenges, agricultural exports from the Southern region have more than doubled (in nominal values) over the past 25 years and currently account for around 1/3 of agricultural cash receipts[i] (Table 1). While the Southern region has experienced significant ag trade growth over this volatile period, the Northeastern, Midwestern, and Western regions have achieved a much greater gain in ag exports (in percentage terms) since 2000. In addition, while trade dependency (measured as ag export share of ag cash receipts) has deteriorated for all regions in recent years amidst slumping U.S. ag exports and growing cash receipts, ag trade dependency in the Southern region has deteriorated relative to other U.S. regions. (Figure 1).

    Table 1: Various Metrics on U.S. Ag Exports by Region (2000-2024)

     Nominal Change in the Value of Ag ExportsReal Change in the Value of Ag ExportsCompoundedAnnual Ag Export Growth RateAg Exports As a % of Ag Cash Receipts
    South+105.0%+53.4%+2.9%32.4%
    Northeast +213.9%+134.9%+4.7%27.4%
    Midwest +266.8%+174.5%+5.3%36.6%
    West +248.2%+160.6%+5.1%34.0%
    Source: Calculated from ERS State Ag Exports and Ag Cash Receipt Data, with real (inflation-adjusted) values deflated by the Bureau of Labor Statistics’ Export Price Index

    Figure 1: Agricultural Exports as a Share of Agricultural Cash Receipts by U.S. Region (2000-2024)

    The reduction in Southern ag trade dependency in recent decades can partially be explained by the various trade challenges confronting several crops unique to the South like tobacco, cotton, rice, sugar, and certain fruits and vegetables. Trade data reveal that these crops have not kept pace with export gains achieved by soybeans, corn, poultry, beef, pork, dairy products, and tree nuts.

    The one crop that sticks out for the Southern region in this discussion is ironically, the crop that was the dominant export commodity during colonial days – tobacco. During the early 2000s, tobacco accounted for nearly 20% of Southern ag exports, compared to less than 3% in recent years, as exports have fallen by more than 70% over the past 25 years. Consequently, tobacco producing states like Kentucky, North Carolina, South Carolina, Virginia, and Tennessee have experienced significant adverse impacts on their ag trade volumes and ag trade dependency relative to other Southern states where tobacco production is negligible.

    In addition, many Southern crops, like tobacco, rice, sugar, tomatoes, and even ag related products like distilled spirits, face stiff competition from imports into the United States. Consequently, these trade trends have likely had a larger adverse net ag trade impact on the Southern region compared to other U.S. regions. Accordingly, commodity organizations for many of these impacted industries are currently pursuing trade policy adjustments such as tariffs and tariff rate quotas to deliver greater protection for their domestic growers.

    [i] Trade data are a challenge to measure on a regional or individual state basis, depending on the individual product. For a state like Kentucky, bourbon and horses are exported directly, whereas cattle or tobacco produced in the Commonwealth are typically transported to other states for finishing/processing and possibly shipped to another state for final export out of the United States. The ERS state ag trade data base uses market share of U.S. ag cash receipts for individual states to prorate U.S. ag exports values by individual ag commodities.  For a discussion of strengths and limitations of this methodology click here.

    Snell, Will. “Trade Trends Show a Greater Adverse Impact on Southern Agriculture Compared to Other U.S. Regions.” Southern Ag Today 6(23.4). June 4, 2026. Permalink