Wineinger “Plant utilization a key factor” in corn refining margins

U.S. Sugars Corporation President Matt Wineinger provided an excellent overview of dynamics affecting the sweetener industry during his presentation at the Golden Growers annual meeting.

In terms of domestic sweetener use, total sweetener consumption remains on the rise, but ‘per capita’ consumption of caloric sweeteners is declining.  Meanwhile, non-caloric sweeteners use is on the rise.   Not all non-caloric sweeteners are benefiting, however.  Diet sodas have seen significant consumption declines driven by concerns over Aspartame.  Recent non-caloric growth has come from stevia and sucralose.

Consumers have adjusted their declining consumption of carbonated soft drinks  primarily by increasing tap water use.

GMO ingredients have become a battleground within the food industry, according to Wineinger  Congress has not yet approved any national labeling legislation. Meanwhile, companies like Campbell, General Mills, and Mars are moving forward with their own labeling method.  Wineinger considered this an encouraging move.  “I believe consumers will simply accept disclosures of genetic food labeling as part of the fabric of food labels, leading to greater acceptance.” stated Wineinger.

When it comes to HFCS pricing, there are several factors to consider.  Domestic sugar prices, freight distribution, ethanol prices, Mexican sugar shipments (to the U.S.), and Mexican sugar supply all have an impact.  While corn prices also figure in, corn milling plant utilization is a key factor when it comes to maintaining margins for corn refiners.  Wineinger highlighted Cargill’s closure of their Memphis plant as a key decision to significantly raise capacity utilization and positively impact profit margins.