Wednesday, October 17, 2018
 CCC To Sell Sugar Inventory For Bioenergy Production - Good News For Lactose Producers  

The American Dairy Products Institute (ADPI) is applauding USDA’s latest announcement that almost 600 million pounds of Commodity Credit Corporation (CCC) owned sugar will be restricted to the production of biofuel.

On October 1, 2013, the CCC acquired 296,500 short tons of sugar in lieu of cash repayments on remaining sugar loans for the 2012 crop year. These sugar loan forfeitures were the result of record domestic sugar production, record Mexican sugar imports, and world prices falling below U.S. price support levels for the first time in several years.

These conditions left the Department with a significant surplus of sugar, which under the 2008 Farm Bill allows the product to be sold into the ethanol trade or non-human food channels.

In the interest of their members, ADPI contacted USDA expressing concerns around the factors of allowing the surplus to be allowed into the non-human feed sector and the significant negative impact that it would have on the processed dairy ingredients market.

“The focus of our concern is the unrestricted sale of a large quantity of sugar into the U.S. feed trade, which is a substantial consumer of lactose,” stated ADPI CEO David L. Thomas. “At the anticipated prices, the sugar would displace lactose and other whey products. This dislocation of the market for these products would have a devastating impact not only to the producers of these dairy ingredients, but also on the broader domestic dairy industry, due to the complex interrelationship of the various factors covered by milk pricing formulas.”

The CCC successfully sold 216,750 short tons to bioenergy producers for $11.3 million under a November 14, 2013 offer, but still holds 79,750 tons in inventory.

 


Posted on Wednesday, November 27, 2013 (Archive on Wednesday, December 04, 2013)
Posted by bholcomb@adpi.org  Contributed by bholcomb@adpi.org
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