USDA Handing Out Tricks for Consumers, Treats for Big Sugar

Halloween kicks off the official season of sweets. Like the famous grizzlies of “Fat Bear Week,” Americans are also stocking up for the long, cold months ahead. Though instead of wet salmon, it’s candy—followed in rapid succession by pies, cookies and other treats. These are all an important part of the fun (or a handy substitute for therapy). But whereas salmon is free for the grabbing by bears who don’t have mortgages, rent or other bills, human groceries continue to be a pricey part of the already expensive holidays. Sadly for cash-strapped families, Washington isn’t making it any easier to partake in the festivities.

Throughout the next two months, American consumers will have to pay out big bucks for the sweet stuff. Experts estimate Americans will spend upward of $12.2 billion on Halloween festivities this year, of which nearly one-third is expected to be spent on candy. This is also when home bakers get busy, which is reflected in an annual fourth-quarter spike in retail sugar sales. Just prepping for Santa’s Christmas Eve snack takes more than 300 million cookies, never mind the dough needed for cookie exchanges, office parties or consumption straight from the bowl.

Sugar, for the tasty tidbits and dopamine boost it gives us, is an essential ingredient in the holiday-season grocery budget.

Unfortunately, that budget is being stretched awfully thin. Due to inflation, grocery purchases are already 2.4 percent higher than they were a year ago. Supply chain disruptions also continue to be a cost factor. Even worse for shoppers and bakers in the United States, sugar—and anything that might contain it—comes at an extra high price.

Unlike our neighbors in Canada and Mexico, the United States has a program in place, administered by the Department of Agriculture (USDA), that forces consumers to pay two or even three times as much for sugar than buyers in other countries. The federal sugar program keeps out most imports and limits domestic sugar production in order to maintain an artificially high price for a basic and necessary ingredient.

All this meddling in the baking aisle essentially constitutes a hidden tax on U.S. consumers, costing $2.5 to $3.5 billion a year according to the latest data from the Government Accountability Office. Though the rate may be debatable, at least the federal, state and other obvious taxes tend to fund programs that are generally understood to broadly benefit the public, such as collectively funding our national defense or highways. This extra-high secret tax doesn’t go into government coffers—it flows straight to high-ranking businessmen and families who are already among some of the wealthiest people in the country.

For example, Chairman of the Board at the U.S. Sugar Corporation (USSC) is Ridgway White, a member of the wealthy Charles Stewart Mott family who, in 2019, shelled out $5.17 million for a home in ritzy Palm Beach County, Florida. Before getting involved in the sugar industry, White’s great-grandfather helped found General Motors and was mayor of Flint, Michigan. Mott also founded the Charles Stewart Mott Foundation, a philanthropic endeavor worth $4.2 billion as of 2021, where White serves as president and CEO. Notably, the foundation owns 19 percent of the USSC’s shares; the C.S. Mott Children’s Hospital—named after its founding benefactor, Charles Stewart Mott—owns 22 percent; and another 3.5 percent is in the hands of Mott family members. This might not sound like much, and the company prides itself on the fact that “employees are the largest shareholders,” but it’s unclear how much influence those employee-shareholders have in practice. The majority of the USSC’s board members are either members of the Mott family or have a close connection through the foundation, the hospital, other Mott business interests or friendship.

More well-known are the infamous Fanjul brothers, Alfonso (“Alfy”) and Jose, often called Pepe. Born in Cuba, they were the scions of a successful sugar cane magnate. The two fled the Communist Castro regime and transplanted the family business to Florida, where over the decades they have amassed a now-international sugar empire of interconnected enterprises, worth $8.2 billion of wealth and power.

Not only have the Fanjul brothers used that wealth and power to buy nice things, such as yachts and mansions, they’ve also bought political support for policies that keep competition and increased sugar supplies at bay to ensure U.S. consumers keep paying top dollar for their empire’s main source of revenue. The brothers are even trying to wealth and power their way out of a Homeland Security investigation into allegations of forced labor at their Dominican Republic sugar plantation. So far, they have been unsuccessful in stopping both the investigation and the resulting customs import ban.

The Fanjuls also have a tropical getaway on the island just to the east of the plantations in the Casa de Campo resort. The compound described as “paradise” by Architectural Digest is dismissed by Pepe Fanjul as “nothing formal like [his] New York apartment or even [his] ranch.” The article goes on to explain that when “the family shows up for Christmas, New Year’s and a couple of weeks in February and April, the Fanjul boys land on the property’s heliport for board meetings, though ‘working in paradise,’ laughs Pepe Fanjul, ‘is harder than working in your office.’”

Hopefully, U.S. consumers stuck in the chilly north can find this heartwarming. In this season of giving, our paying double or triple for a basic commodity enables the Fanjuls and other sugar barons to helicopter into a warm, tropical paradise for Christmas. So long as the federal sugar program remains in place, bakers and beater-lickers will just have to pinch pennies elsewhere. Perhaps a few less presents under the tree is a worthwhile tradeoff to keep Big Sugar in the lifestyle to which they have become accustomed.