USDA not likely to offer sugar for sale under FFP this year

By Erin Voegele | June 06, 2014

The USDA’s Commodity Credit Corp. has announced that it does not expect to sell sugar to biofuel producers through the Feedstock Flexibility Program this year. The notice was part of a larger announcement made by the CCC with regard to the reassignment of fiscal year 2014 sugar allotments. 

The FFP was created as part of 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 certain loans from the CCC. Sugar purchased by the USDA CCC under the program is sold on a competitive basis to bioenergy producers. Those purchasers are required to use the sugar to produce biofuel, such as ethanol. It can also be used to produce butanol or other marketable biofuels. 

Last year was the first year in which the USDA had offered sugar for sale to bioenergy producers under the program. The USDA opened several solicitations for bids in 2013, including those in August, September, November and December.

FrontRange Energy purchased nearly 14.24 million pounds of beet sugar through the first solicitation in August for approximately $854,100, or 6 cents per pound. Buffalo Lake Advanced Biofuels, Central Indiana Ethanol, Pacific Ethanol Holding Co., and Aventine Renewable Energy Inc. purchased a combined 272.05 million pounds of sugar for a total of $12.61 million under the second solicitation.  Aventine Renewable Energy, Central Indiana Ethanol, and Pacific Ethanol Holding Co. also purchased a combined total of 433.5 million pounds of sugar for a combined price of $11.33 million under the third solicitation. Under the fourth solicitation, a combined 159.5 million pounds of sugar was sold for $8.2 million to companies for other non-food uses.