USDA offers additional sugar to bioenergy producers under FFP

By Erin Voegele | September 23, 2013

The USDA’s Farm Service Agency has made a second solicitation under the Feedstock Flexibility Program for Bioenergy Producers. Approximately 830 million pounds of sugar are being offered for sale under the program. Bids are due Sept. 26.

The Feedstock Flexibility Program was created by the 2008 Farm Bill. The program requires the USDA to purchase sugar and sell it as feedstock for bioenergy producers in order to avoid forfeiture of sugar pledged as collateral by processors when securing nonrecourse community loans for them Commodity Credit Corp. Sugar purchased by the CCC under the program is sold on a competitive basis to bioenergy producers. The regulation establishing the program requires that purchasers use the sugar to produce biofuel, including ethanol, butanol or other marketable biofuels as CCD determines.

In August, the FSA issued a first solicitation for bids under the program. Approximately 189.75 million pounds of sugar was offered for sale to bioenergy producers. Front Range Energy LLC submitted a winning bid for 14.2 million pounds of sugar, which was purchased for a price of 6 cents per pound. At that time, the USDA said in a press release that interest in the program from sugar mills was encouraging. However, transportation and other concerns appear to have limited bioenergy company participation.

The 830 million pounds of sugar being offered through the second solicitation includes feedstock from sugarcane and sugar beet sources. The sugar is currently being stored in a wide variety of locations, including storage facilities in Louisiana, Michigan, Colorado, Idaho, Oregon, Nebraska, Wyoming, Montana, Minnesota, North Dakota, and Iowa. A full catalog of offerings was published by the FSA on Sept. 23. 

Biofuel producers interested in purchasing sugar through the Feedstock Flexibility Program must submit offers by 1:30 p.m. CT on Sept. 26. Successful bidders will be noticed of acceptance the following day. Offers must be for at least 10 million pounds. Full instructions for submitting bids is available here

Additional information on the solicitation, along with an updated document addressing frequently asked questions, is available on the FSA website