Your Halloween candy is costing you more than it should—because of a government program.
For decades, the federal sugar program has artificially kept the price of sugar excessively high. According to the most recent data from the U.S. Department of Agriculture, it cost 37.5 cents to buy a pound of wholesale refined beet sugar in the United States, yet it only cost 19.2 cents for a pound of refined sugar on the world market.
Yearly fiscal data tell a similar story. From 2000 to 2014, the average price for a pound of wholesale refined beet sugar in the U.S. was 32.5 cents. The average price for a pound of refined sugar on the world market was just 17.5 cents.
Why does the federal sugar program continue to exist? According to some of the program’s proponents, U.S. federal sugar policy protects jobs that would largely disappear without state intervention. But a study conducted by the U.S. Department of Commerce found that “[f]or each one sugar growing and harvesting job saved through high U.S. sugar prices, nearly three confectionery manufacturing jobs are lost.”
Erin Calvo-Bacci, the owner of a candy store that can turn a few blocks of sugar into practically anything, would likely agree that the high price of sugar eliminates jobs. As the New York Times reported, the success of her business in Reading, Mass. prompted her to expand, and she seems quite set on expanding—to Canada. “We are committed to offering locally made affordable products, but the cost of sugar is driving manufacturers out of the country,” Calvo-Bacci said.
In fact, many other companies have followed suit. Atkinson Candy Co., a peppermint candy manufacturer, and Jelly Belly Candy Co. have both moved large portions of their businesses to Guatemala and Thailand respectively. That same Commerce Department study found that “[f]or the confectionery industry in particular, evidence suggests that sugar costs are a major factor in relocation decisions because high U.S. sugar prices represent a larger share of total production costs than labor.”
The federal government’s current policies benefit a relatively small number of well-connected sugar producers–and that’s one Halloween trick that hurts most of our wallets.