The U.S. Department of Agriculture (USDA) Commodity Credit Corporation announced today that it does not expect to purchase and sell sugar under the Feedstock Flexibility Program in the second quarter of 2017. The Commodity Credit Corporation is required by law to announce quarterly estimates of the amount of sugar available for purchase and sale under the Feedstock Flexibility Program based on crop and consumption forecasts.
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 March 9, 2017, World Agricultural Supply and Demand Estimates report (www.usda.gov/oce/commodity/wasde) projects that domestic fiscal year 2017 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 in fiscal year 2017.
USDA will closely monitor domestic sugar stocks, consumption, imports and other sugar market variables on an ongoing basis, and will continue to administer the sugar program as transparently as possible. The next quarterly estimate regarding the Feedstock Flexibility Program will occur prior to July 1, 2017.
Source:usda.gov