Source: USDA, 8/28/15

The U.S. Department of Agriculture’s (USDA) Commodity Credit Corporation (CCC) announced today a reassignment of projected fiscal year 2015 surplus cane sugar marketing allocation among cane processors and a reassignment of projected surplus beet sugar marketing allocation among beet processors. The Commodity Credit Corporation also announced today that it does not expect to purchase and sell sugar under the Feedstock Flexibility Program for fiscal year 2016.

Feedstock Flexibility Program
Federal law allows sugar processors to obtain loans from USDA with maturities of up to nine months when the sugarcane or sugar beet harvest begins. Upon loan maturity, the sugar processor may repay the loan in full or forfeit the collateral (sugar) to USDA if prices are too low.

The Feedstock Flexibility Program was reauthorized by Congress in the 2014 Farm Bill as a tool to support prices and avoid sugar forfeitures when there is excess sugar in the marketplace. USDA’s Aug. 12, 2015, World Agricultural Supply and Demand Estimates report (www.usda.gov/oce/commodity/wasde) projects that domestic fiscal year 2016 ending sugar stocks are unlikely to lead to forfeitures. Therefore, at this time, USDA does not expect to purchase and sell sugar under the Feedstock Flexibility Program for fiscal year 2016.

USDA will closely monitor domestic sugar stocks, consumption, imports and other sugar market variables on an ongoing basis, and continue to administer the sugar program as transparently as possible. The next quarterly estimate regarding the Feedstock Flexibility Program will occur prior to Jan. 1, 2016.

Fiscal Year 2015 Reassignments
The Commodity Credit Corporation transferred cane sugar marketing allocation from two cane sugar processors in Florida with surplus allocation to another processor requiring more allocation to market its larger-than-expected crop. Similarly, the Commodity Credit Corporation transferred beet sugar marketing allocations from beet sugar processors with surplus allocation to another beet processor requiring more allocation to market its record high crop.