Corn Sweeteners Are Not Subsidized

There is a common misperception that manufacturers of high fructose corn syrup receive government subsidies – they do not.

The New York Times issued the following correction, “An article on Feb. 10 about a White House campaign against childhood obesity described incorrectly programs that affect producers of high fructose corn syrup, a sweetener. Farm programs subsidize the production of corn, and other programs also affect the supply and the cost of corn, sugar and related commodities. But the Agriculture Department itself does not directly subsidize high fructose corn syrup.” (Corrections. The New York Times. February 22, 2010.)

• The corn used to make high fructose corn syrup is purchased on the open market and is subject to prevailing market prices and trade activity at the Chicago Board of Trade (CBOT).

• The U.S. Department of Agriculture does not regulate high fructose corn syrup prices or control supply.

In recent years, the price of corn has been relatively higher than in past years due to a variety of factors including increasing demand, speculation in the commodity markets, volatile energy prices, ethanol demand and other factors.

• Contrary to misperceptions, high fructose corn syrup is not a protected commodity; rather, it is subject to all of the highs and lows of marketplace supply and demand.
  
  
• According to an October 2009 assessment of U.S. farm programs and the corn refining industry by Promar International, “The net effect of federal programs for agriculture and renewable fuels has been an increase in the price that corn refiners pay for corn. In fact, corn prices over the last three fiscal years – 2006/07 through 2008/09 – have been more than 80% higher than the $2.17/bushel average of the prior ten years. Furthermore, during this time, support payments to growers have actually declined. In any case, 75% of the costs involved in producing corn sweeteners and the corn refining industry’s other products are actually for capital and financing, energy and utilities, other materials like enzymes and packaging, labor, taxes, repairs and maintenance, and professional services.”
  Promar International. 2009. A Perspective on U.S. Farm Programs and the Corn Refining Industry: Confirms that High Fructose Corn Syrup is Not Subsidized.

The Farm Bill provides a safety net to certain farmers (growers – not refiners) in the United States if the crop price falls below certain levels. Refiners of these commodities do not receive government support.

The only caloric sweeteners that benefit directly from government support programs in the United States are sugar and honey.

“The U.S. sugar program uses price supports, domestic marketing allotments, and tariff-rate quotas (TRQs) to influence the amount of sugar available to the U.S. market. The program supports U.S. sugar prices above comparable levels in the world market.”
U.S. Department of Agriculture, Economic Research Service. 2009. Sugar and Sweeteners: Policy.

• More information on the government sugar and honey programs is available at these USDA web pages:

USDA Sugars & Sweeteners Policy

USDA Sugar Program Fact Sheet

USDA Farm Service Agency Price Support Policy

• Please see the links below for additional information on the sugar support program.

“Sugar Provisions of the 2008 Farm Bill,” by the Sweetener Users Association, June 2008

FoodBusinessNews.net article, “Sugar outlook not so sweet,” by Ron Sterk, August 18 2009

While price may have been a larger factor decades ago in food manufacturers' choice to switch from sugar to high fructose corn syrup, their continued use of high fructose corn syrup today is based mainly on the benefits it provides rather than its price relative to sugar.

• High fructose corn syrup is nutritionally the same as sugar and is especially prized for its ability to retain moisture, enhance fruit and spice flavors, reduce tartness and aid in the fermentation in foods. For example, it reduces tartness and acidity in spaghetti sauces and ketchup, and keeps bran flakes moist.