USDA expects no actions under FFP for crop year 2020

By Erin Voegele | September 03, 2020

The USDA’s Commodity Credit Crop announced on Aug. 28 that it does not expect to purchase and sell sugar under the Feedstock Flexibility Program for crop year 2020, which runs from Oct. 1, 2020 through Sept. 30, 2021.

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 harvest, 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 was originally established in the 2008 Farm Bill and reauthorized in the 2018 Farm Bill as an option to avoid sugar forfeitures. The program encourages the domestic production of certain biofuels, including ethanol, butanol and other marketable biofuels, from surplus sugar. The USDA sold surplus sugar to bioenergy producers in 2013 under the program.

In its announcement, the CCC said that the USDA’s Aug. 12 World Agricultural Supply and Demand Estimates report projects that crop year 2020 (fiscal year 2021) U.S. ending sugar stocks are unlikely to lead to forfeitures. Therefore, the USDA does not expect to purchase and sell sugar under the FFP for crop year 2020.

The USDA is expected to issue its next quarterly estimate regarding the FFP on or before Jan. 1, 2021.