USDA Announces No Actions Under Feedstock Flexibility Program
USDA's Commodity Credit Corporation announced this week it does not expect to purchase and sell sugar under the Feedstock Flexibility Program for crop year 2022, which ends September of this year. The CCC is required by law to quarterly announce estimates of sugar to be purchased and sold 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 harvests begin. On loan maturity, the sugar processor may repay the loan in full or forfeit the collateral, sugar, to USDA to satisfy the loan.
The program was initially authorized in the 2008 Farm Bill, as an option to avoid sugar forfeitures. 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.
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