USDA offers surplus sugar to biofuels industry

By Erin Voegele | August 22, 2013

The Commodity Credit Corp. is accepting offers from bioenergy producers to purchase sugar under the Feedstock Flexibility Program for Bioenergy Producers (FFP). Offers, modification of offers or withdrawal of offers must be received by the Kansas City Commodity Office by Aug. 28 at 1:30 p.m. CT. Successful offers will be notified the following day.

The FFP, created in the 2008 Farm Bill, requires the USDA to purchase sugar and sell it as feedstock for bioenergy producers in order to avoid forfeiture of sugar pledged as collateral by processes when securing nonrecourse community loans from the CCC. The USDA Farm Service Agency published a notice soliciting bids under the FFP earlier this month, and published a catalog listing of offered quantities on Aug. 21. That listing includes approximately 198.75 million pounds of sugar, including 138.75 million pounds of cane sugar stored in Louisiana, 15 million pounds of beet sugar stored in Nebraska, and 45 million pounds of beet sugar stored in North Dakota.

In its announcement soliciting purchase offers, the FSA stresses that under the FFP the use of sugar sold by CCC to bioenergy producers is restricted to the production of biofuel. For the purposes of the invitation, the FSA said biofuel is defied to mean products such as ethanol, butanol and other marketable biofuels as CCC determines. “Bioenergy producers are encouraged to contact the contracting officer before the bid due date in order to determine whether their product qualifies under FPP as a biofuel,” said the FSA in the announcement. The document also states 10 million pounds is the minimum for which an offer can be submitted.

The USDA has published two new documents answering frequently asked questions about the program, they are available here and here. Within the documents, the UDSA addresses transportation issues, storage issues, substitution and a wide range of other factors.