Under the Feedstock Flexibility Program, if USDA is faced with the likelihood of loan forfeitures, it is required to purchase surplus sugar and sell it to bioenergy producers to reduce the surplus in the food use market and support sugar prices.
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 using the latest available data. The next quarterly estimate regarding the Feedstock Flexibility Program will occur on or before April 1, USDA touches the lives of all Americans each day in so many positive ways.
To learn more, click here. Howdy Neighbors! The Feedstock Flexibility Program FFP is designed to divert sugar in excess of domestic food consumption requirements to ethanol production. Although not part of the U. These agreements were originally signed in and amended in Under these agreements, the United States has suspended the imposition of prohibitive anti-dumping AD and countervailing duties CVD , which, if imposed, would make Mexican sugar uncompetitive in the U.
In turn, Mexican sugar producers must comply with minimum prices and maximum quantities for sugar shipped into the United States. USDA makes loans available to processors of domestically grown sugarcane and to domestic processors of sugar beets at statutory loan-rate levels. Loans are taken for a maximum term of 9 months and must be liquidated along with interest charges by the end of the fiscal year in which the loan was made.
Unlike most other commodity programs, the sugar program makes loans to processors and not directly to producers. The reason is that sugarcane and sugar beets, being bulky and very perishable, must be processed into sugar before they can be traded and stored. To qualify for loans, processors must agree to provide payments to producers that are proportional to the value of the loan received by the processor. USDA has the authority to establish minimum producer payment amounts.
The loans are nonrecourse. When a loan matures, USDA must accept sugar pledged as collateral as payment in full, in lieu of cash repayment of the loan, at the discretion of the processor.
The processor is not required to notify USDA of the intention to forfeit the sugar under loan. The current loan rates for raw cane and beet sugar are set in the Farm Bill. The Farm Bill allows processors to obtain loans for in-process sugar and syrups at 80 percent of the loan rate. Sugar sold in the United States for domestic human consumption by domestic sugar beet and sugarcane processors is subject to marketing allotments that are designed to limit domestic supplies.
An overall allotment quantity OAQ is established at not less than 85 percent of estimated deliveries for domestic human consumption for the marketing year October through September.
The OAQ is divided between refined beet sugar For cane sugar, Hawaii is allotted , short tons, raw value STRV , and the allocations for the mainland cane-sugar-producing States Florida, Louisiana, and Texas are assigned based on the States' and processors' production histories.
USDA has authority to reallocate these allocations during the year and does so for Hawaii, which stopped producing sugar in Beet sugar processors are assigned allotments based on their sugar production histories. The program sets out allocation conditions for new entrants and for the effect of the sale of factories between processors. The program provides for several contingencies that could require reassignment of allotments during the crop year.
If a cane processor cannot market its allocation, it is reassigned to the other processors within the same State, taking into account their ability to make up the deficit and also the interests of producers served by the processors. If the deficit cannot be eliminated by this step, the remainder is allocated to the other cane-producing States, and then to the processors in those States. If CCC inventories are insufficient to cover the deficit, then the deficit is assigned to imports.
The procedure for a beet-sugar-processor deficit is similar, except there is one less step since there are no State-level allocations. There is no provision for cane sugar OAQ deficits to be reassigned to beet sugar processors or for beet sugar OAQ deficits to be reassigned to cane sugar processors.
The program provides that sugar forfeited to the CCC counts against marketing allotments made in the year in which the loan to the processor was made. This clarification reinforces that sugar in excess of a processor's allotment at the end of the marketing year cannot be forfeited.
Other marketings that count against allotments include a sale of sugar under the Feedstock Flexibility Program FFP ; export of sugar from the U. Customs Territory that receives credit under the refined sugar re-export program; and for any integrated cane processor and refiner, the movement of raw cane sugar into the refining process.
The Feedstock Flexibility Program operates to avoid sugar loan forfeitures to the CCC by requiring the diversion of sugar from food use to ethanol production. Prior to each September 1, the Secretary of Agriculture Secretary must announce the amount of sugar if any for the CCC to purchase and make available for sale to ethanol producers. Raw cane sugar, refined beet sugar, and in-process beet sugars are eligible for purchase.
Such sugar can be purchased from any marketer located in the United States. Sugar purchased from a sugarcane or sugar beet processor is counted against that processor's marketing allotment. The program provides for specific ways to dispose of sugar owned by the CCC without increasing future forfeiture risk. The program includes the payment-in-kind PIK authority to transfer ownership of CCC sugar to processors in exchange for reductions in production through reduced sugar crop planting.
Under PIK, if sugar beet or sugarcane processors accept CCC inventory in return for a reduction in production of sugar beets or sugarcane already planted, the resulting crop cannot be used for commercial use other bioenergy feedstock.
0コメント