USDA: No second quarter sugar purchases expected under FFP

By Erin Voegele | April 01, 2016

On March 31, the USDA Commodity Credit Corp. announced it does not expect to purchase sugar under the Feedstock Flexibility Program during the second quarter of this year. The CCC is required to announce quarterly estimates of sugar to be purchased for the FFP based on crop and consumption forecasts.

Under federal law, processors of sugar beets and domestically grown sugarcane can obtain USDA loans when the harvest begins. The loans provide interim financing so that commodities can be stored after harvests, when prices are typically low, and be sold later, when prices are higher. When the nine-month loan matures, the processor can repay the loan in full or forfeit the collateral sugar to the USDA.

The FFP is designed to encourage the domestic production of biofuels from surplus sugar. The program was reauthorized in the 2014 Farm Bill and encourages the domestic production of certain biofuels, including ethanol, butanol and other marketable biofuels, from surplus sugar. In 2013, the USDA sold surplus sugar to bioenergy producers under the program.

The USDA is expected to make its next quarterly estimate under the program by July 1.