(NAFB)--USDA’s Farm Service Agency has announced that purchase invitations have been extended to solicit bids to the Commodity Credit Corporation through the Feedstock Flexibility Program. The program - created in the 2008 Farm Bill - requires the purchase of sugar as a feedstock for producing fuel-grade ethanol and other biofuels to avoid forfeiture of sugar pledged as collateral by processors when securing nonrecourse commodity loans from CCC. The use of the program follows two successful sugar exchanges earlier this summer.
USDA notes federal law allows sugar processors to obtain loans from the CCC with maturities of up to nine months at the beginning of the crop year. Upon loan maturity - the sugar processor may repay the loan in full or forfeit the sugar used as collateral to the government to satisfy the loan. According to USDA - the last time sugar forfeitures occurred was in 2004 - but atypical market conditions have caused USDA to take a number of actions this crop year to avoid forfeitures and ensure the sugar program operates at the least cost to the federal government.