Source: USDA, 9/28/18

The U.S. Department of Agriculture’s (USDA) Commodity Credit Corporation (CCC) today announced the marketing assistance loan rates for sugar for crop year 2018 (fiscal year 2019). CCC also announced provisions of the fiscal year 2019 domestic sugar program.

USDA offers marketing assistance loans to processors of sugar beets and domestically grown sugarcane to provide interim financing to producers so that commodities can be stored after harvest when market prices are typically low and be sold later when price conditions are more favorable. The national average loan rate is 18.75 cents per pound for raw cane sugar and 24.09 cents per pound for refined beet sugar, the same as last year, and are adjusted regionally to reflect marketing cost differentials.

The loans are available beginning Oct. 1, 2018 and mature at the end of the nine-month period beginning the first day of the first month after the month in which the loan is made, or the end of the fiscal year in which the loan is made, whichever is earlier. Producers have the option of delivering the pledged sugar collateral to CCC as full payment for the loan at maturity.

Loan Rates for Refined Beet Sugar
The refined beet sugar processing regions and applicable 2018-crop (fiscal year 2019) loan rates in cents per pound of refined beet sugar are:
• Michigan and Ohio – 25.39
• Minnesota and the eastern half of North Dakota – 23.64
• Northeastern quarter of Colorado, Nebraska and the southeastern quarter of Wyoming – 24.16
• Montana, northwestern quarter of Wyoming and the western half of North Dakota – 23.73
• Idaho, Oregon and Washington – 24.12
• California – 25.26

Loan Rates for Raw Cane Sugar
The 2018-crop (fiscal year 2019) raw cane sugar loan rates in cents per pound of cane sugar, raw value are:
• Florida – 18.01
• Louisiana – 19.68
• Texas – 18.86

Note: Hawaii stopped producing sugar in January 2017 and hence, requires no loan rate.

Sugar beet and sugarcane processors who receive CCC loans in fiscal year 2019 are required to make minimum grower payments for all sugar beets and sugarcane received from growers. Processors failing to meet the required minimum grower payment will be ineligible for loans. Sugar beet grower minimum payments are the amount specified in the grower/processor contract.

Sugarcane processors must, at minimum, pay growers for their share of production from molasses and sugar per ton of cane as specified here. State minimum payments are:
• Florida – $26.90 per net ton
• Louisiana – $29.31 per gross ton
• Texas – $25.64 per gross ton

CCC has not modified the fiscal year 2019 raw sugar loan schedule of premiums and discounts because the raw cane sugar loan rate has not changed. These schedules can be found in the Farm Service Agency (FSA) handbook 10-SU, which is available at https://www.fsa.usda.gov/Internet/FSA_File/10-su_r04_a27.pdf or in FSA’s state and county offices.

Finalizing Fiscal Year 2018 Sugar Allotment and Marketing Allocations
The Sugar Program requires the Secretary to reassign surplus allocations to raw cane sugar imports if it is determined that beet and/or cane processors will be unable to fully market their allocations of sugar domestically. It has been determined that the beet and cane sectors will be unable to use 150,000 and 750,000 short tons, raw value, respectively. As such, CCC is reassigning the 900,000 short tons, raw value allotment surplus to sugar imports already expected in the September 2018 World Agricultural Supply and Demand Estimates report. This action does not constitute an actual increase in imports of any kind. The final fiscal year 2018 sugar marketing State allotments and processor allocations are listed in the table below:

Initial Fiscal Year 2019 Sugar Allotment and Marketing Allocations
CCC is announcing the initial fiscal year 2019 overall sugar marketing allotment, which is established at 10,412,500 short tons, raw value. The overall sugar marketing allotment is set at 85 percent of the estimated quantity of sugar for domestic human consumption for the crop year of 12,250,000 short tons, raw value as forecast in the September 2018 World Agricultural Supply and Demand Estimates report. Statute requires that a fixed portion of the overall sugar marketing allotment be assigned to the beet sector and the cane sector. CCC distributed the fiscal year 2019 beet sugar allotment of 5,659,194 short tons, raw value (54.35 percent of the overall sugar marketing allotment) among the sugar beet processors and the cane sugar allotment of 4,753,306 short tons, raw value (45.65 percent of the overall sugar marketing allotment) among the sugarcane States and processors.

The Farm Bill requires that 325,000 short tons, raw value of the cane sector allotment be assigned to “offshore” States, meaning Puerto Rico and Hawaii. When the last Puerto Rican cane processor permanently terminated operations in 2004, CCC reassigned the Puerto Rico allocation of 6,356 short tons, raw value to Hawaii. Since the lone Hawaiian processor, Hawaiian Commercial and Sugar Company (HC&S), shut down its operations in January 2017, CCC temporarily reassigned the combined Puerto Rican and Hawaiian unused allotments (325,000 short tons, raw value) to the “mainland” sugarcane-producing States of Florida, Louisiana and Texas. CCC, at this time, has not determined that HC&S permanently terminated its operations.

CCC determined that farm-level proportionate shares are not necessary in Louisiana in fiscal year 2019, the only State eligible for proportionate shares, because the cane sugar sector is not expected to fill its allotment.

USDA will closely monitor stocks, consumption, imports and all sugar market and program variables on an ongoing basis. USDA will continue to administer the sugar program as transparently as possible using the latest available data and adjust as necessary to ensure adequate supplies of both raw and refined sugar in the domestic market.

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