USDA Announces 2011 Crop Sugar Loan Rates
WASHINGTON, Sept. 23, 2011—The U.S. Department of Agriculture's (USDA) Commodity Credit Corporation (CCC) today announced loan rates for 2011 crop sugar as required by the Food, Conservation, and Energy Act of 2008 (2008 Farm Bill). The 2011 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, which is an increase from last year. These national loan rates are adjusted regionally 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, meaning that producers have the option of delivering the pledged sugar collateral to the CCC as full payment for the loan at maturity. USDA's 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 (FY) and mature at the earlier of (1) the end of the 9-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 FY in which the loan is made.
The refined beet sugar processing regions and applicable 2011-crop (FY 2012) loan rates in cents per pound of refined beet sugar are:
- Michigan and Ohio – 25.72
- Minnesota and the eastern half of North Dakota – 24.06
- Northeastern quarter of Colorado, Nebraska and the southeastern quarter of Wyoming – 24.51
- Montana, northwestern quarter of Wyoming and the western half of North Dakota – 24.08
- Idaho, Oregon and Washington – 22.90
- California – 24.76
All of the beet growing regions have higher loan rates for the 2011 crop than last year due to the mandated increase in the national beet sugar loan rate.
The 2011-crop (FY 2012) raw cane sugar loan rates in cents per pound of cane sugar, raw value are:
- Florida – 18.16
- Hawaii - 17.46 (18.75 cents per pound if stored on the mainland)
- Louisiana - 19.52
- Texas – 18.69
All of the cane sugar states have higher 2011 crop loan rates than last year except for Florida. The negative effect on Florida's loan rate was caused by the relative increase in its marketing costs compared to other cane-producing states, which more than offset the positive effect on Florida's loan rate caused by the increase in the national raw cane sugar loan rate.
Sugar beet and sugarcane processors who receive CCC loans in FY 2012 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 processors must pay to their growers at least the payment levels listed below for average quality sugarcane. A grower's payment level can be adjusted according to the quality adjustment method in the grower/processor contract.
States and minimum payments are:
- Florida – $27.59 per net ton
- Hawaii – $26.42 per net ton
- Louisiana – $27.48 per gross ton
- Texas – $22.70 per gross ton