U.S. sugar subsidies benefit sugar refiners at the expense of candy manufacturers. Last year, the world average price for sugar was 26.5 cents per pound, but the average U.S. price was 43.4 cents per pound. This significant price differential is a result of federal price supports and subsidies for the U.S. sugar industry. One such subsidy program includes government lending, which allows sugar refiners to take out government loans in order to pay sugar growers instantly. The purchased sugar is used as collateral. This gives refiners multiple options. If sugar prices increase, the refiners will sell the sugar on the open market for a profit. If prices decrease, they will forfeit the sugar to the government and keep the loan money.
This benefit to refiners comes at the expense of candy manufacturers. With the sugar prices remaining artificially high, Bob Simpson, president of Jelly Belly California and chair of the National Confectioners Association, says "we'd just like [sugar producers] to compete on a fair, open market without the intrusion of the federal government." Jelly Belly says that sugar is the "most expensive ingredient" in candy and accounts for 40 percent of its product, which results in higher retail prices for the consumer.