USDA to Buy 400,000 Pounds of Sugar in a Bid to Make Your Snickers Bar More ExpensiveSubmitted by Ed Thinking on Wed, 03/13/2013 - 17:47
Here's a sad story: First the government loaned big sugar producers $862 million, secured with the 4 billion pounds of sugar the companies were expecting to produce this year. They did this under a 1934 law designed to allow the U.S. Department of Agriculture to prop up sugar prices. They do the same thing every. single. year.
But then there was a bumper crop of sugar beets and a strong sugarcane harvest. That means prices for sugar fell. But we can't have that! That might mean consumers could get cheap candy!
So the government buys a lot of sugar in an effort to prop up prices—probably 400,000 pounds in this case—and then, by law, must sell it to ethanol producers. But ethanol producers don't really want it, so the government will have to (sorry!) sweeten the deal and sell it at a loss of about 10 cents per pound, or $80 million total.