USDA expects no actions under Feedstocks Flexibility Program

By Erin Voegele | August 30, 2022

The USDA’s Commodity Credit Corp. announced on Aug. 30 that it does not expect to purchase and sell sugar under the Feedstock Flexibility Program for crop year 2021, which runs from Oct. 1, 2021 through Sept. 30, 2022.

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 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 first established in by the 2008 Farm Bill as an option to avoid sugar forfeitures. The program was reauthorized in the 2018 Farm Bill. The FFP 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 2021 (fiscal year 2022) 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 2021.

The USDA is expected to issue its next quarterly estimate regarding FFP on or before Jan. 1, 2023. That quarterly estimate will address the 2022 crop year.