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Winter 2011WELCOME to Short & Sweet, United Sugars Corporation's electronic newsletter, where you can learn about industry news, sugar news nuggets and the latest information from United Sugars. We hope you enjoy our quick-read format. Just scroll to the stories that interest you and click. Welcome: A message from President John Doxsie Four reasons why the U.S. sugar market is so tight Seed Uncertainty: Genetically Modified (GMO) Beets and Spring Planting Money-Saving Tip: Keep Rail Cars on the Move New to United Sugars: Meet Katherine Poindexter Quality Documents – Now Available Online from United Sugars Test Your Sugar IQ A Message from John Doxsie, President
Dear Friends, Welcome to our winter edition of Short & Sweet, the newsletter from United Sugars Corporation. We know that market developments can have real implications for our customers’ businesses. That’s why we often give space in this newsletter over to updates on what’s happening in the sugar market and what some of those things might mean. In this edition, we return again that common theme to take a fresh look at some of the latest developments. Please know, however, that the discussion doesn’t start and stop here. If we can help you review sugar market conditions as they relate to your business and goals, your sales manager is always happy to have that discussion one-on-one. Just ask. Thank you as always. I hope you enjoy this edition of Short & Sweet. With best wishes, John Doxsie Four reasons why the U.S. sugar market is so tight
As with any commodity, the supply of sugar depends upon a number of inter-related factors. Weather, consumer demand, government regulation and other variables all contribute to how much sugar is in the system, how much is likely to be available in the future, and the price buyers can expect to pay. At this writing, the sugar market in the U.S. can be described as “tight,” with many different variables coming into play. Some variables are easier to predict than others. At the moment we’re seeing a fair amount of uncertainty in several key determinants that shape our view of what we might expect looking ahead. There seems to be four key factors that are contributing to the current tight market:
There is also the possibility of flooding this spring. At this point, flooding concerns aren’t as high as some previous years for beet growing areas, but we continue to watch the conditions evolve. As always, it’s a good idea for purchasers to keep a watch on market developments and forecasts so they can make informed decisions about the sugar they buy. For help in planning your own purchase strategy, talk with your United Sugars sales manager. Seed Uncertainty: Genetically Modified (GMO) Beets and Spring PlantingIf you’ve been following sugar industry news of late, you know that one of the biggest stories of 2010 had to do with genetically modified (GMO) sugar beet seeds – and whether an adequate study was conducted to support their approval for use. First, a bit of background. Developed by Monsanto and KWS, and also approved for use in Canada, the E.U. and Japan, GMO sugar beet seeds need fewer applications of herbicides. This allows sugar beet plants to thrive after only one application of Roundup herbicide rather than multiple applications of traditional herbicide. The results include greater resistance to diseases and insects. And because refined sugar contains no protein, the use of GMO seeds has no effect on the resulting refined sugar. Within a couple of years of their introduction and USDA approval, GMO seeds gained rapid acceptance with most growers. Last year, nearly the entire sugar beet crop in the U.S. resulted from GMO seed plantings. Yields were high, and the scene was set for continued, near-exclusive use of GMO seeds in 2011. All of that changed – at least temporarily – last year. In August, in response to a lawsuit brought by several environmental advocacy organizations and organic seed growing interests, a federal district court judge in San Francisco vacated the USDA’s approval of GMO sugar beet seeds. The judge’s action precluded the planting of GMO seeds in the U.S. until the USDA performed a new environmental impact statement and approved the seeds anew. The judge’s action did not affect harvesting, processing or marketing of GMO beets (or sugar produced from them) that were already planted. The USDA responded by announcing next steps, including permission for beet seed producers to produce GMO seeds under strict permit conditions. It said it would expedite completion of the impact study, thought to require about two years to complete. And it also recommended allowing GMO seeds back into the fields by 2011. Critics charged that the USDA was attempting to circumvent the law, and on November 30, the federal court judge ordered the destruction of all GMO “stecklings” (or seedlings) resulting from plantings in September. The 9th U.S. District Court stayed this injunction to allow the USDA to appeal. And in late February, a U.S. appeals court reversed the earlier order to destroy stecklings and APHIS approved the planting of GMO seeds under strict conditions. It is uncertain if the plaintiffs will seek an injunction. Estimates were that a return to conventional beet seeds would have resulted in a beet crop around 20 percent below normal, given reduced availability of seeds and reduced yields. This, in turn, would have had an effect on the amount of refined sugar resulting from subsequent beet production – contributing to an already-tight sugar market. Advocacy groups have already made it clear they plan to contest the latest rulings. We will continue to watch developments in this important story. Look for more in upcoming issues of Short & Sweet, and please feel free to talk with your sales manager for more information. Money-Saving Tip: Keep Rail Cars on the Move
The economy may be in the midst of a slow recovery, but companies are still as interested as ever in saving costs. And we continue to be committed to work with customers to help keep costs low. One way we do this is to encourage the on-time cycling of rail cars. There are several reasons why this is helpful. First, shipping costs are lowest when the components of our supply chain are operating at their highest efficiency. When a customer holds a rail car too long, for example, it increases storage costs. Secondly, delays in rail car turnover can result in a demurrage charge for customers, which we always want to avoid. A recent measure shows that the average time that rail equipment spends on-site can be halved with no reduction in quality or service. So, we routinely work with our customers to reduce “residence time”– or the time cars spend on-site at a delivery destination. We’re often able to help customers reduce the residence times of rail cars at their facilities, where need be, without sacrificing service in any way. Keeping cars rolling. It’s just another way we’re working hard to keep service levels high and costs as low as possible for our customers. Please feel free to contact your sales or customer service representative. New to United Sugars: Meet Katherine Poindexter
Katherine Poindexter admits she looks at trains a little differently than she used to. “My kids think it’s funny, but since joining the United Sugars team I’ve been checking numbers on sides of freight trains when we’re out driving around. Always have to keep an eye on the sugar, you know,” she says with a laugh. Katherine is approaching her one-year anniversary as Regional Sales Manager with the United Sugars Industrial Sales Group. For her, the move represented an opportunity to take her years of experience in the investment world and focus on a single commodity market. “I’ve worked across the whole spectrum of investing, from portfolio management and financial advising to institutional work,” she says. “I think this background has given me a unique perspective on commodity markets that allows me to understand my customers’ goals and help them reach them.” Katherine was also drawn to the culture of United Sugars and the strong, one-to-one relationships the company has with its customers. She’s been pleased to find that’s the case as she’s started meeting with clients. “I value having customer relationships that go beyond the sale and allow in-depth caring and understanding of customer needs” she says. “I could tell that United Sugars was a place where I could do that kind of work. That’s what really attracted me to joining the team. There’s a feeling of family here. We as sales managers are allowed to care.” A native of the Twin Cities area, Katherine leads an active life with her son (14) daughter (11) and the family dog. They’re especially fond of swimming, biking, running and downhill skiing. And, at least for Katherine, tracking those freight trains. Quality Documents – Now Available Online from United SugarsNeed an allergen declaration? An SQF certificate for a United Sugars plant? Material safety data sheets? These and a host of other commonly requested documents and forms relating to certification, documentation, and policies are now available for immediate access and downloading at unitedsugars.com. From the home page, simply click the Quality Docs link. Or, click here to browse what’s available. If you don’t see the form you need, please contact your customer service representative or Mary Clare Sethi at 218-236-4207. Test Your Sugar IQ
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