News Column

USDA Reassigns Fiscal Year 2014 Sugar Allotments

May 30, 2014



WASHINGTON, May 30 -- The U.S. Department of Agriculture'sFarm Service Agency issued the following news release:

The U.S. Department of Agriculture's (USDA) Commodity Credit Corporation (CCC) today announced the reassignment of cane sugar marketing allotments among cane sugar producing states, beet sugar marketing allocations among beet processors, and the remaining, reassigned to imports of raw cane sugar. CCC also announced that no actions are anticipated under the Feedstock Flexibility Program through Sept. 30, 2014.

Fiscal Year 2014 Reassignments

Federal law requires a maximum limit on the volume of sugar that can be sold in the United States by domestic sugarcane and sugar beet processors for domestic human consumption. These limits, known as allotments or allocations, are set at a level sufficient to keep raw and refined sugar prices above sugar loan rates established by law, but that the nationwide quantity of sugar is no less than 85 percent of estimated deliveries for domestic human consumption for the crop year. If USDA determines that sugar sold by a processor will be less that its assigned limit, then USDA reassigns the limit to other processors. For cane sugar, a reassignment is made first among processors in the same state, then to other cane sugar states, and then to CCC. Should CCC have no sugar in its inventory, any remaining limits are reassigned to imports of raw cane sugar.

CCC has determined that the cane sugar sector is not expected to fill at least 550,000 tons of its assigned maximum limits, and that none of the processors within Florida, Louisiana and Texas require additional limits. CCC therefore has reassigned an allocation of 29,501 short tons, raw value (STRV) to the lone Hawaiian cane processor, with the remaining unused limit for the entire cane sector of 550,000 STRV reassigned to estimated imports of raw cane sugar.

CCC also redistributed unused limits from beet sugar processors to beet sugar processors requiring more limits. The remaining unused limit for the entire beet sector, 100,000 STRV, was reassigned to estimated imports of raw cane sugar.

Limits reassigned to imports were reflected in the USDA World Agricultural Supply and Demand Estimates report (WASDE) and is not expected to increase the overall level of sugar imports to the United States.

The revised 2014 fiscal year cane and beet sugar allocations can be found at www.fsa.usda.gov/Internet/FSA_File/fy_2014_overall_beet.pdf

Feedstock Flexibility Program

Under the law authorizing the Feedstock Flexibility Program, CCC is required to announce quarterly estimates of the quantity of sugar CCC anticipates to purchase from the domestic market for resale to biofuel manufacturers. Based on the fiscal year 2014 ending sugar stocks-to-use projection of 12.9 percent reported in the May 9, 2014, WASDE, and sugar prices being above loan forfeiture levels, CCC has determined it will take no action under the FFP at this time.

USDA will closely monitor U.S. sugar stocks, consumption, imports and other sugar market variables. The department will reconsider additional adjustments to import tariff-rate quotas and domestic marketing allotments later in fiscal year 2014 to ensure an adequate sugar supply for the domestic market and to prevent market disruptions.

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Source: Targeted News Service