The USDA’s Commodity Credit Corporation won’t be buying and selling sugar under the Feedstock Flexibility Program for the 2020 crop year, which runs through September 30, 2021.
The CCC is required by law every quarter to announce its estimates of sugar that the agency will purchase and sell under the Feedstock Flexibility Program based on crop and consumption forecasts.
Federal law allows sugar processors to get loans from USDA with maturities of up to nine months when the sugarcane or sugar beet harvest begins.
On loan maturity, the sugar processor may repay the loan in full or forfeit the collateral sugar to USDA to satisfy the loan. The FFP got created as an option to avoid forfeitures on sugar loans.
If the USDA faces the likelihood of loan forfeitures, it’s 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’s most recent WASDE report shows that the U.S. ending sugar stocks are unlikely to lead to forfeitures, so USDA doesn’t expect to buy and sell sugar under FFP for the crop year 2020.