If sugar costs $1.70/kg, but takes 100kgs of sugarcane and over 2000L of water to produce that 1 kg, how is the end product profitable?

Question

If sugar costs $1.70/kg, but takes 100kgs of sugarcane and over 2000L of water to produce that 1 kg, how is the end product profitable?

In: 300

Answer 1

Read about the Fanjul Brothers who control the sugar industry in South Central Florida around Lake Okeechobee. They own 155,000 acres in that area alone, in addition to holdings in Louisiana and the Domican Republic among other places. The Fanjul Brothers are among a handful of sugar industry oligarchs who control the price of sugar in the US. These oligarchs receive a generous subsidy from the US Government which results in the price of sugar being 3 times higher in the US compared to most other places in the world. The high price of sugar in the US resulted in many food companies to turn to high-fructose corn syrup as an inexpensive substitute.