As Coca-Cola adds a cane sugar product, American farmers worry about potential impact

The announcement last month that Coca-Cola will introduce a new product made with cane sugar — instead of high-fructose corn syrup — came as a surprise to many corn growers, especially in Iowa, the country’s top corn producing state.

Coca-Cola is not replacing its beverages with cane sugar versions; rather, it plans to add a new product using “U.S. cane sugar,” its CEO said.

“As part of our ongoing innovation agenda, this fall in the United States, we plan to expand our Trademark Coca-Cola product range with U.S. cane sugar to reflect consumer interest in differentiated experiences,” James Quincy said in a quarterly earnings call July 22.

The announcement came a week after the White House issued a statement by President Donald Trump — via X, formerly Twitter — that said the president had been speaking with the beverage company about using cane sugar in its drinks.

“This will be a very good move by them — You’ll see. It’s just better!" the statement said.

The problem, according to reporting by The Wall Street Journal, is that a large portion of U.S. cane sugar is “spoken for,” meaning foreign cane sugar may have to be imported to meet demand.

That doesn’t sit well with many U.S. farmers.

“It just is sad that, at a time where agriculture needs help, we're switching to importing products rather than using the ones grown in the U.S.,” Iowa Corn Growers Association President Stu Swanson said.

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Impact on farmers

Costs per pound for cane sugar exceed high fructose corn syrup, priced at $0.61 and $0.49, respectively, the Associated Press reported. Increases in the cost of production for Coca-Cola could result in increased costs for consumers.

The U.S. produces approximately 9 million tons of cane and beet sugar annually, which in the 2019-20 crop year contributed total cash receipts of $2.258 billion, according to the U.S. Department of Agriculture.

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Swanson said the push to move away from high fructose corn syrup to cane sugar is especially confusing because high fructose corn syrup is not any less healthy than cane sugar. He said there’s a negative correlation between corn syrup use and childhood obesity levels, which continue to rise, according to the Centers for Disease Control and Prevention.

In the event of a full change by Coca-Cola from corn syrup to cane sugar — at this point just hypothetical — Swanson said Iowa corn farmers could face losses of $0.15 to $0.34 per bushel, resulting in a potential total loss of $925 million in Iowa, and $5 billion across the U.S.

Initially, the 2026 corn carryout — or the amount of corn remaining after demand is met — is down from the projected more than two billion bushels in January, to 1.67 billion bushels as of mid-July, Swanson said.

Regardless of the carryout size, Swanson said increased demand to import foreign sugar and decreased interest in carryout corn would ultimately put farmers deeper in an already negative margin.

“We have this massive carryout to find a home for but we’re importing sugar which will impact the potential off-load for that,” he said.

Swanson also said farmers closer to wetmills like Cargill or ADM, where products like corn syrup and other corn derivatives and byproducts are produced, would suffer as demand shifts.

The 2025-26 marketing year — the period in which demand for 2025 corn is allotted — will begin Sept. 1, 2025 and end Aug. 31, 2026

Importing becomes tricky, especially in 2025, because the 2018 Farm Bill is set to expire by the end of the year. The 2018 Farm Bill specifically installed tariff rate quotas to mediate sugar imports. Essentially, amounts imported exceeding the quota face a higher tariff rate.

For reference, the U.S. imported 3.42 million tons in raw value of sugar to the tune of $2.65 billion in fiscal year 2024, according to Southern Ag Today.

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Market responses

These figures assume a full pivot by Coca-Cola away from corn syrup and to cane sugar, but the company has indicated it’s only planning to add a new product line.

For Doug Greeson, 58, a farm operator growing corn in Packwood, two hours south of Cedar Rapids, the corn syrup versus cane sugar debate is representative of a delicate balancing act — one farmers have done and will continue to do.

He said discussion of changes in demand for corn can do more harm than good.

“It's never good, especially when prices are low, to lose bushels to cane sugar,” Greeson said. “… negative news is probably a little worse on the market than what the actual facts are.”

Greeson said approximately 3 percent of Iowa corn goes to corn syrup production, a relatively low amount, but it still would sting in the long run, given other market conditions. He said other stressors are causing low prices — less than $4 per bushel — and corn syrup losses won’t help.

Expectations are a big part of commodity markets, and prices can fluctuate depending on which crops go where, and in what amounts. Trump signaled the U.S. would begin selling ethanol to Asia, but Greeson said it did little to improve corn prices.

Greeson predicts Iowa farmers will see higher yields during harvest this year, but commodity prices ultimately will be lower.

“Everybody wants to grow big bushels,” he said, “but when you do that, you're not going to have big prices with it.”

A primary concern for Swanson isn’t the balancing act of price — it’s the relationships Iowa corn growers have developed with beverage companies like Coca-Cola.

He forecasts shrinkage in the corn syrup market, but more importantly a reduction in relationships made between producers through the market.

“Corn farmers have had a long time building out that corn syrup market and have a great relationship with beverage companies like Coke,” he said. “We have a product that has worked for a number of years and the production of [these beverages] has proved that corn sugar is a good product.”

Comments: 641-691-8669; evan.watson@thegazette.com