Organic sugar tariffs could push up prices for organic foods, industry warns

Organic food prices could rise sharply this fall as the United States tightens import restrictions on specialty organic sugar and imposes a 50% tariff on shipments from Brazil, a policy shift that industry officials say will raise production costs without providing immediate relief to domestic sugar growers. The Organic Trade Association has warned that the combination of a zero quota on specialty organic sugar imports and high duties could push the price of organic sugar up by about 30% on average, influencing the cost of a wide array of organic foods from yogurt to cookies. The changes come even as demand for organic sugar has long outpaced imports, a dynamic that has left manufacturers reliant on a limited domestic supply and imported stockpiles.

On Oct. 1, the U.S. Department of Agriculture is slated to eliminate the quota that allows duty-free import of specialty organic sugar beyond the WTO minimum. Last year, that quota stood at 231,485 tons (210,000 metric tons), but this year’s policy shifts will set the quota at zero. All imports beyond the WTO minimum would face high out-of-quota duties. The USDA maintains that the restrictions are meant to support the U.S. sugar industry, but industry officials say the move ignores the practical supply gap and the time needed to bring domestic organic sugar production online. In August, after initial tariff actions, organic sugar prices rose, and the new regime is expected to push costs higher still. U.S. manufacturers contend they cannot source enough organic sugar domestically: there is only one U.S. farm producing the specialty crop, and converting a conventional farm to organic takes at least three years.

Industry officials warn that the combined effect of the tariff and import caps may force manufacturers to raise prices or curb production. Britt Lundgren, who oversees government affairs for organic yogurt maker Stonyfield, said the policy amounts to punishing domestic manufacturers for using an ingredient that cannot be readily obtained within the United States and is unlikely to be available in the near future. Tom Chapman, co-CEO of the Organic Trade Association, described the situation as yielding “dramatic impacts,” noting the tariff is so high that it cannot be absorbed alongside other tariffs that already apply.

The cost outlook is not uniform across products. Some organic items rely heavily on organic sugar as a primary ingredient, while others use it more sparingly. Whole Earth Brands, a company that sells a variety of natural sweeteners, expects organic sugar costs to rise by about 100%, according to company president Nigel Willerton. “We supply every major supermarket in the U.S. and natural food stores. We’ll see our prices go up quite considerably. There’s nothing we can avoid there,” Willerton said. How much prices change will depend on the sugar content of a given product, with products where sugar is a central ingredient likely to see larger increases than items where organic sugar is only a minor component.

Smaller organic food makers, many of which operate with thin margins, may be especially vulnerable. Willerton noted that many companies in the sector are “small premium” producers that could be priced out of the market if costs rise too sharply, and reformulating to replace organic sugar would not be immediate or cheap. The regulatory landscape also complicates sourcing: organic ingredients must be segregated from conventional ingredients during processing, and the supply chain is already constrained by limited processing capacity. Marianne Martinez, a spokesperson for Florida Crystals Corporation—the only organic sugar producer in the United States, which accounts for about 8% of the domestic market, up from roughly 2% a decade ago—said the USDA’s policy is “encouraging and could result in an increase in U.S.-grown and milled organic cane sugar production if it becomes a long-term policy.”

Industry observers say the policies may push some manufacturers to slow production or reduce offerings, particularly if they cannot pass higher costs to consumers. Stonyfield’s Lundgren cautioned that the broader effect on the sector could extend beyond price tags, potentially affecting product availability as smaller producers struggle to absorb new costs. The USDA has not announced additional initiatives to bolster organic growers in the interim.

As the policy shifts play out, the organic sugar market remains a study in tight supply and policy-driven volatility. Analysts and industry members say the stakes are high for a sector that has long relied on imported organic sugar to meet demand while contending with higher production standards and certification costs. The coming months will reveal whether domestic producers can scale enough to fill the gap left by restricted imports, or whether the price pressures will continue to ripple through the food system, affecting shoppers and manufacturers alike.

The USDA has historically used a mix of minimum price supports and loan programs to manage sugar policy, and observers say the current measures appear aimed at the domestic sugar industry rather than expanding organic production to fill the import gap. The department did not respond to inquiries about the policy changes.