USDA To Buy More Sugar For Biofuels Production

Last week, the U.S. Department of Agriculture (USDA) announced that it is seeking bids from bioenergy producers to purchase sugar from the Department as part of the Food, Conservation and Energy Act of 2008 (the 2008 Farm Bill) Feedstock Flexibility Program (FFP). This will be the second time that USDA will utilize the FFP. The 2008 Farm Bill directs USDA to keep sugar prices at or above certain levels, and authorizes USDA to either acquire sugar through forfeiture of sugar loans made by the USDA's Commodity Credit Corporation or to buy sugar and sell it to bioenergy producers until prices raise to those levels. Domestic sugar prices have been falling this year.

USDA was criticized for its first sale of sugar as part of the FFP about a month ago because in that instance USDA had purchased 7,118 short tons of refined beet sugar for $3.6 million and sold it to renewable fuel producer Front Range Energy for $900,000 (a loss of $2.7 million).