Sugar Outlook: HFCS – Wildcard in the U.S.-Mexico Sweetener Market

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Sugar Outlook: HFCS Wildcard in the U.S.-Mexico Sweetener Market. Robb MacKie President and CEO American Bakers Association USDA Agricultural Outlook Forum February 25, 2011. About ABA. Wednesday, Sep. 17, 2008 Is High-Fructose Corn Syrup Really Good for You? By Lisa McLaughlin - PowerPoint PPT Presentation

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Robb MacKiePresident and CEOAmerican Bakers AssociationUSDA Agricultural Outlook ForumFebruary 25, 2011

1 Sugar Outlook:HFCS Wildcard in the U.S.-Mexico Sweetener Market

About ABA

Wednesday, Sep. 17, 2008Is High-Fructose Corn Syrup Really Good for You? By Lisa McLaughlinShopping last week in her local New York City grocery store, Elise Mackin, 32, filled her cart with items she knows to be good for her family whole grains, fruits and veggies and shied away from products that

"The special harmfulness of high-fructose corn syrup has become one of those urban myths that sounds right, but is basically wrong. Nutritionally, high-fructose corn syrup and sucrose may be identical." Michael Jacobson, executive director of the Center for Science in the Public Interest

Clinton: Too much ethanol could lead to food riots

By MARY CLARE JALONICKThe Associated PressThursday, February 24, 2011; 4:26 PM

WASHINGTON -- Former President Bill Clinton on Thursday warned farmers that using too much corn for ethanol fuel could lead to higher food prices and riots in poor countries.

"We need a balanced approach," he said.

Impact to BakersAverage US Retail Baker Annual Sugar Costs $77,000 US sugar priceCost at World Sugar Price$31,000 World sugar priceSavings to US Retail Baker$46,000 - SavingsNational Median Salary Retail Bakery Clerk$26,544Commercial Bakers would save significant moreSweetener Usage Trends U.S. Trending From HFCS to SugarDespite Cost DifferentialConsumer Awareness Natural, OrganicIncrease in Whole GrainsMexico Trending Heavily From Sugar to HFCS30.1 percent increase for HFCS17.2 percent decrease for sugarPrimary source of imported sugar US

Source: USDA ERS data for 2010Expectations for 2011Early hopes of the 10/11 season returning the global balance to surplus are now forgottenContinued market volatilityDespite uptick in production, market looks distressedPotential for political and weather related risk extremely highRising food price inflation domestically and globallySignificant potential for heightened trade retaliationFood industry margins will continue to be squeezed, especially among bakers Recommendations:Ease ethanol mandatesPhase out federal ethanol supportsEliminate sugar import quotasEliminate sugar for ethanol mandateEliminate sugar price supports

Results:Lower food price inflation domestically and globallyDecrease trade tensions Eliminate barriers to job creation

The time has come.

Thank youLean Beef_CHART1.7341.671.671.671.78051.79321.7243751.731.821.8481.9561.951.881251.8311.911.91751.771.5551.551.551.61821.6151.57711.5251.481251.4981.51.51.51.47751.4891.551.533751.52751.581.58751.621.6541.71251.89262.0952.071.9171.8451.8251.8771.94751.951.97621.991.991.95151.91.91.85751.841251.846751.90461.982.092.161062.16752.13222.016751.9751.9271.81971.7751.8461.88751.91.8931.8951.8851.8991.8751.8751.8751.8751.84251.8751.897751.931.93241.9622.0262.0252.0251.9971.9751.9751.9871.9852.058752.1022.221252.32.4322.452.2761.983751.80251.7621.751.75751.8281251.8381.81.81.81.81.81.81.81.8381.891.952.0422.22.2352.22.2152.306252.3892.3691752.3812.436252.525

$/lbLEAN BEEF (100% VL Insides)Source: UB - YS Boneless Beef, 100% Lean Insides-(LTL)

Bellies_CHART0.9163750.82250.638560.59820.5461250.59820.68150.701350.80350.8990.8023750.91181.0691.05950.8603250.6493750.66490.7131250.7336250.713250.73310.65050.61220.6760.875750.77930.6261250.8170.75760.80150.78560.8101250.8740.86850.96260.98051.0491250.9050.860250.8560.81750.8190.80320.9381.0431.09881.2218751.125251.1841.04750.94250.9236250.942750.917160.90.84050.85950.839420.90150.70.78870.98650.92040.8648750.81550.80.7816750.7429250.805660.776250.8866750.9841.00250.94250.9110.7770750.801250.8120.851250.9706250.950.9451.0881251.0341.02250.890340.8168750.7371250.757340.780.74250.7950.6760750.685350.8960.7933250.850.907340.8004250.7790.7150250.74230.737260.7466750.79750.78950.793660.7090.7980.6828750.6840.697680.741250.74750.8780.903350.908751.0591.213551.116251.1741.468751.5389751.059040.90750.9561.12251.2

$/lbBELLIESSource: USDA Bellies, Skin-On, Trimmed 14-16#

HFCS_CHART8.58.58.58.58.58.55999999999910.410.7510.43759.68759.59.59.59.59.59.512.2512.2511.811.51110.37510.37510.37510.37510.37510.37510.37510.37510.37510.9687512.7510.659.8759.8759.8759.8759.8759.8759.8759.8759.8759.8759.97510.1259.93759.8759.8759.8759.8759.8759.87510.31211.937512121212121212121212.514.5937514.62514.62514.62514.62514.62514.62514.62514.62514.62514.62514.62517.562517.62517.62517.62517.62517.62517.62517.62517.62517.62517.62517.62519.52722.3821.6319.3819.3819.3819.3819.3819.3819.3819.3819.3819.3819.3819.3818.9818.3818.1316.3816.3816.3816.3816.3816.3818.5819.3819.3819.3819.38

cents / lbHFCS (High Fructose Corn Syrup)Source: Milling & Baking(monthly average price)

Inside Rounds_CHART1.8668751.91152.02582.0152.0008252.08242.2506252.3452.35482.19152.0792.07852.132.1282.201252.13751.961341.9251.896251.8771.90051.911.9171.963751.991.68281.7441.82251.90922.082.2082.231252.07752.072.2342.20752.003752.0282.212.7322.7445752.4222.076662.04252.42752.5592.80252.565252.23552.3272.296752.44052.24152.3852.4852.47352.44252.53082.6852.3603752.0571.962.0962.408752.42252.562.697252.542.3232.020752.05452.34352.2852.470252.55212.452252.343752.23922.3350752.30052.61282.65622.64152.57452.458752.40762.4122.38752.2572.3052.511252.59662.486752.44752.65352.69752.9723252.82962.7593752.382.3834252.2338252.514062.40852.339752.252752.07851.951.97882.1472.38252.44482.205752.058752.28522.31452.45952.7582.766252.543452.31332.4952.670252.58782.562252.688363.00052.7713333333

$/lbINSIDE ROUNDSSource: Urner Berry YS 169A 5 Inside Round, Cap-Off Choice(monthly average price)

Crude Oil_CHART29.60531.2533.2899833.08534.39528.46229.9930.10527.23627.71528.827.5726.852527.2926.7422.187519.7659819.57519.822520.80247524.48225.79247526.7959825.842527.162528.12829.892528.9126.41429.597533.0919836.02532.557528.392528.2530.50530.957531.7928.08530.46431.3132.412533.97834.736.81536.62240.2838.3141.02245.392545.317553.792548.702543.43247.3848.3754.942553.23849.5756.7259.13865.162565.01661.5858.2459.24866.0662.563.45870.9470.532571.72874.69747573.1964.44658.97558.44562.4754.177559.8661.3964.437563.6167.53274.83247572.8119879.7786.342594.84892.21592.9795.376105.705112.895125.622137.0575135.6275116.824104.712575.07855.612539.077542.36640.34548.802551.657559.2369.797565.53671.267568.842575.5577.11574.187577.50876.197580.85584.8672.682575.332576.43476.1875.381.72284.27589.2789.50586.9366666667

$/galCRUDE OILSource: Futures (West Texas)(monthly average price)

TkyProdCost_CHART0.36780.34740.35550.34960.33470.35010.37530.38690.40610.40270.41530.42680.42270.4130.39210.36840.35290.34980.34560.35180.35760.35510.35360.36250.37370.37470.36266320.35222340.34485790.34836320.35864780.36910470.37255190.37150060.37310690.37320940.36514320.35609850.33829250.32919330.35938770.38167830.4064790.42126410.44146960.45115390.44950440.45116820.45765930.44640640.44218810.42972710.43866110.45566420.48576990.51812270.54572880.56236550.58010.59420.61210.59570.61680.5590.53080.50210.49470.50160.49960.51330.5070.50060.52170.49410.49070.47640.47180.46970.51840.54090.53720.52070.50310.49010.47640.47730.4810.47360.48660.524140544

$/lbTURKEY PRODUCTION COST (Live Whole Bird)Source: AgriStats(monthly average price)

Soybean Meal_CHART159.625153.425169.84167.575175.05192.86178.525163.45152.52153.775163.7168.28176.275171.74167.225162.075161.76151.2154.625149.1158.7159.25163.08169.9185.725181.5180.5167.725166.62165.55168.22174.375174.325181.425193.62191.9183.1180.4200.825224.72235.25229.8251.46263.35301.225315.84293.075281.5260.2191.65166.225155.025154159.52158.9163.325190.075189.46198.1221.7214.5196.1175.3169.7175.2189.5182.3181.325174.24172.325174.7178.8168.625160.325160.78177.15193.375187.86202.775221.7216.24200.175205.9225.92231.5229.4263.975271.5284.76322.3341.825360.08332.025341.4338.6405.45418.85352.14331.875263.12262.575263.6312.42290.2286.125317.3365.78403.425357.04368.625312.35295.46306.25310.55294.52275.15262.55279.14276.925286.475305.52310.925305.825319.9338.425352.48373.175374.4333333333

$/tonSOYBEAN MEALSource: Nearby CBOT Futures(monthly average price)

Coffee_Robusta_CHART0.37761952280.36208382470.36160754790.33452780550.30118842420.27660346550.29619885690.28440533430.26689648920.25288034110.25752971060.25782454870.23621065050.21382563730.19459312350.17077927970.17254830810.17361426110.16476911910.17973782090.22888505850.23371586680.22416764950.23054068770.22986029210.2303365690.27703438270.29393087180.35090265810.34257915270.38093078110.36718679130.33668239140.33906377570.33702258910.29982763310.3121881520.32595482170.33271341740.31488705430.29948743540.32658985760.3605189150.33225982040.31298194680.32214460670.31785811490.36956817560.31407057970.29200308450.28860110680.26319967340.2842919350.33575251750.32080649550.37580513470.44021591220.45513925430.51290483530.54295563820.52354168560.46153497230.40950739360.41730926250.47072031210.50811938670.56665608270.55282137350.51165744350.52753333940.51608001450.52862197220.5574707430.67268438720.79442982850.67665336120.68391091350.68465934860.72473464570.71294112310.68592942030.7155493060.76022861290.83851945930.82679397620.78172911190.82849496510.94382200851.06813027310.82951555840.89324594031.07584142251.09713780281.01446974510.99945568361.04735552931.11652907561.04291027850.95595572890.77165925790.75614623970.72019867550.75496688740.7443527170.71033294020.69876621610.69581783540.66145786080.65680849130.64580876350.66327224890.63984396260.60521182980.60078925880.59965526630.63458223710.58786174360.60146965440.59523269530.69286945480.78045904020.77077474370.74219813120.7983307630.85718497690.88968520370.95017236691.0146965436

$/lbCOFFEE - ROBUSTASource: Nearby futures (LIFFE)(monthly average