The company also cited pressure from foreign sugar producers as a further reason why it will not process sugar beets at its Eastern Oregon plant this year.
Instead, all of Amalgamated's regional beet processing will be done at the company's plant in Nampa, about 37 miles to the east.
Officials said that the plant would continue to process brown sugar, which involves about 30 people, according to the Associated Press.
The production cutbacks will lead the loss of around 160 jobs.
Company officials say the laid-off employees will receive pay for 60 days, plus severance benefits.
The proposed Central American Free Trade Agreement is provoking concerns that it could dramatically increase sugar imports and put strain on the US industry, which has suffered from the increasing emphasis on health and weight.
The food industry has been blamed by consumer groups for fuelling the obesity epidemic. According to the World Health Organisation, approximately 300 million people worldwide are believed to be obese and 750 million overweight. Evidence suggests that obesity significantly increases the risk of heart disease, diabetes and other life-threatening conditions.
This has created a considerable move away from sugar towards sweeteners as consumers look for sugar free products and food makers introduce zero-calorie or low-calorie sugar substitutes into their new product formulations.
The global sweeteners market currently leads growth in the food additives market and holds considerable potential growing 8.3 per cent year on year until 2008 according to market analysts Freedonia
According to the US Sugar Association, the average American consumes about nine teaspoons per day of sugar, per person.