Front Range Energy LLC, a 40 MMgy ethanol plant in Widsor, Colo., was the winning bidder on 14.2 million pounds of table sugar sold under the Feedstock Flexibility Program for Bioenergy Producers. Although the USDA was seeking 25.2 cents a pound the actual purchase price was 6 cents a pound, or a total of $854,100.&nbsp;
Dan Sanders Jr., vice president of the ethanol plant told Ethanol Producer Magazine it was a blind bid process. Ultimately, it wasn&rsquo;t known if the company&rsquo;s bid would prevail or not. &ldquo;We looked at a value that would work for us at our facility in Windsor, Colo., delivered price, and took everything into account, including logistics and storage and all that and came up with the 6 cent value,&rdquo; he said, adding that other factors of consideration were the current cash corn price in the area as well as anticipated new crop cash prices.
The FFP was created as part of the 2008 farm bill and requires the USDA to <a href="http://www.ethanolproducer.com/articles/10177/usda-offers-surplus-sugar-to-biofuels-industry" target="_blank">purchase sugar and sell it to bioenergy producers</a> when sugar pledged as collateral for loans from the Commodity Credit Corp. faces forfeiture.&nbsp;This is the first time sugar was sold through the program. The <a href="http://www.fsa.usda.gov/Internet/FSA_File/sugar_purchase_exchange_inv3.pdf" target="_blank">CCC paid $3.58 million for the sugar</a>, meaning, minus the amount paid by Front Range, it was sold at a loss of $2.7 million.&nbsp;USDA clarified that if the sugar had been forfeited at the end of August, it would have cost the CCC that same $3.58 million figure.
The sugar Front Range purchased is table sugar produced from sugar beets. The company will transport it about 150 miles from its storage location in Gering, Neb., and start the process of using it as an ethanol feedstock later this month, Sanders said.
USDA announced Aug. 21 that it was accepting offers on about 198.75 million pounds of sugar in several storage locations and the deadline for bidding was Aug. 28. Sanders said he suspected the timeline is the reason not many ethanol plants participated in the bidding process. &ldquo;It was kind of a short window,&rdquo; he said.
All the details on how the sugar feedstock will be incorporated into the fermentation process are yet to be determined. However, Sanders said the company had done some bench scale testing with sugar purchased at a local grocery store. For full-scale operations, a percentage of sugar will be mixed into the grain mash, starting with a conservative amount and ramping up in search of the optimal inclusion level. &nbsp;&ldquo;We&rsquo;re going to see what our facility can handle,&rdquo; he said, adding that the company doesn&rsquo;t believe it will need to add any additional infrastructure or ingredients, such as yeast or enzymes, to process the sugar.
The key to Front Range supplementing its corn feedstock with sugar was if it could purchase it at a value that would be profitable. &ldquo;If this program continues for whatever reasons and the opportunity continues to present itself we&rsquo;ll continue to look at bidding on it,&rdquo; he said.
The USDA said in a <a href="http://www.fsa.usda.gov/FSA/newsReleases?area=newsroom&amp;subject=landing&amp;topic=ner&amp;newstype=newsrel&amp;type=detail&amp;item=nr_20130830_rel_0158.html" target="_blank">news release</a> that interest in the program from sugar mills was encouraging.&nbsp;However, bioenergy company participation was limited due to transportation costs, volume of feedstock available and other concerns. &ldquo;USDA expects greater participation in FFP as these concerns are addressed,&rdquo; it said.
CCC is currently evaluating options to avoid September forfeitures of sugar, USDA said. However, it is not expected that the FFP will be used to purchase sugar in 2014, due to a lower domestic sugar surplus forecast next year and the fact that the program was implemented this year to reduce sugar stocks. &ldquo;USDA will closely monitor stocks, consumption, imports and all sugar market and program variables on an ongoing basis,&rdquo; the agency said.
Front Range has another sugar feedstock project in its future. In January a 15-year<a href="http://www.sweetwater.us/news/second-cellulosic-ethanol-deal-announced-sweetwater-energy-and-front-range-energy-sign-15-year" target="_blank"> offtake agreement was signed</a> between the ethanol plant and Sweetwater Energy.&nbsp;Sweetwater is in the process of acquiring land in Windsor, where it plans to produce a liquid stream of cellulosic sugar to sell to Front Range, initially enough to replace about 7 percent of its corn feedstock.
Sweetwater expects to start delivering feedstock to ACE Ethanol LLC in 2014, after which Front Range will start receiving product for testing, Sanders said. The feedstock production facility in Colorado is expected to be completed in the first half of 2015.&nbsp;
&nbsp;

Sugar beets are grown in California, Colorado, Idaho, Michigan, Minnesota, Montana, Nebraska, North Dakota, Oregon, Washington and Wyoming.

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2013/09/sugar-beet-usda_13783381222299_thumb.jpg

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Front Range Energy LLC, a 40 MMgy ethanol plant in Widsor, Colo., was the winning bidder on 14.2 million pounds of table sugar sold under the Feedstock Flexibility Program for Bioenergy Producers for 6 cents per pound.

Colo. ethanol plant scores sugar feedstock for 6 cents per pound

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