While many operators have benefited from corn subsidies in the past, the industry will likely contend with strong grain prices reducing US subsidies over the next five years.
New York, NY (PRWEB) January 30, 2015
Over the past five years, the High Fructose Corn Syrup Production industry has contracted due to a decline in consumers' per capita consumption of products containing high fructose corn syrup (HFCS). Many health-conscious individuals have become wary of consuming products with HFCS, due to the ongoing debate regarding whether products containing HFCS cause weight gain, diabetes and heart disease. Due to limited consumer demand, US production of HFCS declined between 2010 and 2013, according to the latest available US Department of Agriculture data.
In 2015, industry revenue is expected to decline despite an uptick in HFCS production. Overall, growth in production can be attributed to the advent of new enzymes, which are expected to bolster the efficiency of converting starches into products like HFCS. According to IBISWorld Industry Analyst Sarah Turk, “While the inundation of new enzymes into the market will buoy industry operators' profitability, HFCS producers will still grapple with limited demand from some upstream industries.” Additionally, as the Soda Production industry, which accounts for much of the demand for HFCS, has become increasingly concentrated over the past five years, soda manufacturers have been better able to secure low HFCS prices, cutting into this industry’s revenue. During the five years to 2015, industry revenue and profitability are both expected to contract overall, despite investments in cost-cutting strategies such as the development of new enzymes.
“While many operators have benefited from corn subsidies in the past, which enabled operators to access low-cost corn in bulk, the industry will likely contend with strong grain prices reducing US subsidies over the next five years,” says Turk. This trend, which may be partly attributable to ethanol production supporting a rise in corn prices, may cut into the industry's access to low-cost cornstarch. Consequently, industry revenue is expected to continue its decline through 2020, albeit at a slower rate than during the previous five years.
For more information, visit IBISWorld’s High Fructose Corn Syrup Production in the US industry report page.
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IBISWorld industry Report Key Topics
Operators in this industry manufacture high fructose corn syrup (HFCS), a sweetener made from milled corn, which is used as a major input for downstream food production, such as soft drinks, baked goods and syrups.
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