USDA Announces 2012 Crop Sugar Loan Rates

By CnAgri2012-09-25 19:37:46 Print

The U.S. Department of Agriculture's Commodity Credit Corporation (CCC) Monday announced loan rates for 2012-crop (Fiscal Year 2013) sugar as required by the 2008 Farm Bill. The 2012-crop national average loan rate, as specified in the 2008 Farm Bill, is 18.75 cents per pound for raw cane sugar and 24.09 cents per pound for refined beet sugar, the same as last year. Regional loan rates are developed from national loan rates to reflect marketing cost differentials.

USDA's Sugar Loan Program provides price support loans to processors of sugar beets and domestically grown sugarcane. Price support loans are nonrecourse, thus processors have the option of delivering the pledged sugar collateral to the CCC as full satisfaction for the loan at maturity. The USDA Farm Service Agency (FSA) administers nonrecourse loans for the 2008 through 2012 crops on behalf of the CCC. Sugar and in-process sugar loans are available beginning Oct. 1 of each fiscal year and mature at the earlier of (1) the end of the nine-month period beginning on the first day of the first month after the month in which the loan is made or (2) the end of the fiscal year in which the loan is made.

The refined beet sugar processing regions and applicable 2012-crop loan rates in cents per pound of refined beet sugar are:

-- Michigan and Ohio -- 25.57 Minnesota and the eastern half of North Dakota -- 23.93 Northeastern quarter of Colorado, Nebraska and the southeastern quarter of Wyoming -- 24.44 Montana, northwestern quarter of Wyoming and the western half of North Dakota -- 24.01 Idaho, Oregon and Washington -- 23.30 California -- 24.84

The 2012-crop raw cane sugar loan rates in cents per pound of cane sugar, raw value are:

-- Florida -- 18.13 Hawaii -- 17.57 (18.75 cents per pound if stored on the mainland) Louisiana -- 19.46 Texas -- 18.88

Sugar beet and sugarcane processors who receive CCC loans for the 2012 crop are required to make minimum grower payments for all sugar beets and sugarcane received from growers. Processors failing to meet the required minimum grower payment will be ineligible for loans. Sugar beet grower minimum payments are the amount specified in the grower/processor contract. Sugarcane grower minimum payments are the amount specified in the grower/processor contract, but with the state raw cane sugar loan rate substituted for the processor's sugar price, at 96 degrees polarity, in the contract's payment formula. This is a change from FSA's past practice of announcing a statewide minimum sugarcane grower payment per ton of average quality cane delivered to the mill. FSA cannot use its past computation for the FY 2013 minimum sugarcane payment because the required molasses pricing data is not available. FSA will solicit comment on alternative methods to compute sugarcane minimum grower payments prior to establishing the FY 2014 sugarcane minimum grower payments.

CCC has not modified the FY 2013 raw sugar loan schedule of premiums and discounts incurred upon forfeiture as the raw cane sugar loan rate is unchanged from last year.