USDA to purchase sugar for ethanol
August 16, 2013 | 03:27 PM
The Agriculture Department’s Farm Service Agency announced Thursday that the Commodity Credit Corporation has solicited bids to purchase sugar under the provisions of the Feedstock Flexibility Program to be sold on a competitive basis to bioenergy producers to produce biofuels.
USDA is expected to pay more for the sugar than the energy producers will pay for it, but the program is intended to cost less than paying farmers for sugar they have put under loan to USDA.
If sugar prices are low, as they are currently, farmers have the option of forfeiting sugar to the government rather than redeeming it.
Offered sugar must be pledged as collateral for a CCC loan with a maturity date of August 31 and the quantity of sugar accepted by CCC will not exceed the sugar processor’s outstanding loan quantity, FSA said.
USDA is expected to pay more for the sugar than the energy producers will pay for it, but the program is intended to cost less than paying farmers for sugar they have put under loan to USDA.
If sugar prices are low, as they are currently, farmers have the option of forfeiting sugar to the government rather than redeeming it.
Offered sugar must be pledged as collateral for a CCC loan with a maturity date of August 31 and the quantity of sugar accepted by CCC will not exceed the sugar processor’s outstanding loan quantity, FSA said.
