Spencer, IA: (Nov. 26, 2013) – The U.S. Department of Agriculture has sold sugar to domestic ethanol producers at an almost 90% discount.
The sale was the third this year under a government program that aims to boost prices for the sweetener.
The program, a part of the 2008 farm bill, requires the USDA to buy sugar and sell it to domestic biofuel producers if it believes sugar processors might default on their government operating loans. When a processor defaults, they forfeit sweetener that was put up as collateral. The most recent sale took nearly three-quarters of the sugar in the USDA’s possession off its books after processors defaulted on loans at the end of September.
For ethanol makers, the sale provides a cheap feedstock at a time when ethanol prices are low.