2014 Farm Bill

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UNITED STATES DEPARTMENT OF AGRICULTURE

FARM SERVICE AGENCY FACT SHEET

October 2017

Sugar Loan Program, Sugar Marketing Allotments and 

Feedstock Flexibility Program

OVERVIEW

The federal Sugar Loan Program provides 

nonrecourse loans to processors of domestically 

grown sugarcane and sugar beets with maturities 

of up to nine months from when the sugarcane or 

sugar beet harvest begins. The loans provide sugar 

producers with interim financing at harvest time 

to meet cash flow needs without having to sell the 

commodity when market prices are typically at 

harvest-time lows. Allowing sugar producers to 

store production at harvest helps the more orderly 

marketing of commodities throughout the year.

Upon loan maturity, the sugar processor may repay 

the loan in full or forfeit the collateral (sugar) 

to the U.S. Department of Agriculture (USDA) 

to satisfy the loan. Giving CCC title to the loan 

collateral is known as a “forfeiture” of collateral. 

Thus, sugar producers always have the opportunity 

to receive at least the loan proceeds from their 

crop, which becomes a price floor on the returns to 

domestic sugar producers.

The Agricultural Act of 2014 (2014 Farm Bill) 

provides the USDA Farm Service Agency (FSA) 

with the authority to administer sugar nonrecourse 

loans for the 2011 through 2018 crops on behalf of 

the Commodity Credit Corporation (CCC).

LOAN ELIGIBILITY

Loans for sugar and in-process sugar (e.g. the 

intermediate sugar-containing product, as CCC 

determines, produced in the processing of 

sugarcane or sugar beets) are available beginning 

Oct. 1 of each fiscal year and mature at the earlier 

of:

(1) The end of the nine-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 fiscal year in which the loan is 

made.

If a loan is made in the last three months of a fiscal 

year (July, August or September), the processor 

may re-pledge the sugar as collateral for a second 

loan (referred to as a supplemental loan) in the 

subsequent fiscal year. The supplemental loan is 

made at the loan rate in effect at the time the initial 

loan was made and matures in nine months minus 

the quantity of time that the initial loan was in 

effect.

To be eligible, processors must:

• Process sugar from domestically grown 

sugarcane or sugar beets from producers 

who are in compliance with both highly 

erodible and wetlands regulations (for more 

information on conservation compliance, go to 

www.fsa.usda.gov/compliance);

• Agree to all terms and conditions in the loan 

application; and

• Execute a note, security agreement and storage 

agreement with CCC.

LOAN RATE

The 2014 Farm Bill requires the Secretary of 

Agriculture to provide nonrecourse loans to 

processors of domestically grown:

(1) Sugarcane at a rate equal to 18.75 cents per 

pound for raw cane sugar for each of the 2011 

through 2018 crop years; and

(2) Sugar beets at a rate equal to 24.09 cents per 

pound for refined beet sugar for each of the 2011 

through 2018 crop years.

Loan rates are adjusted annually to reflect the 

processing location of the sugar pledged as 

collateral. Beginning Oct. 1, of each year, beet and 

cane sugar regional loan rates may be found at 

https://www.fsa.usda.gov/programs-andservices/economic-and-policy-analysis/

dairy-and-sweeteners-analysis/index under 

“Announcements.”
FACT SHEET

Sugar Loan Program October 2017

The in-process sugar loan rate equals 80 percent of 

the loan rate applicable to raw cane sugar or refined 

beet sugar, as determined by the Secretary on the 

basis of the source material for the in-process sugar 

and syrups. In-process sugars and syrups do not 

include raw sugar, liquid sugar, invert sugar or 

syrup, or other finished products otherwise eligible 

for sugar loans.

• In-process sugar forfeiture: The law 

authorizes CCC to accept forfeiture of inprocess sugar and syrup loan collateral as 

full loan repayment if the processor converts 

them within one month after loan maturity 

into raw cane sugar or refined beet sugar of 

acceptable grade and quality for sugar eligible 

for the loans. If forfeited in-process sugars are 

not converted into raw cane sugar or refined 

beet sugar of suitable quality and transferred 

to CCC within one month, CCC may charge 

liquidated damages.

• In-process sugar crystallization: If the 

processor does not forfeit the collateral, but 

instead further processes the in-process sugar 

into raw cane sugar or refined beet sugar and 

repays the loan, the processor may obtain a 

loan at the higher rate for the raw cane sugar 

or refined beet sugar. The term of a loan made 

for an in-process sugar, when combined with 

the term of a loan made for raw cane sugar 

or refined beet sugar derived from in-process 

sugars, may not exceed nine months.

MINIMUM PRICE SUPPORT FOR 

SUGARCANE

As a condition to receive CCC sugar loans, 

sugarcane processors are required to pay their 

growers at least the minimum payments as 

specified in the annual CCC loan rate news release 

and available in their FSA county office.

SUGAR BEET MINIMUM PAYMENT

Sugar beet grower minimum payments are the 

amount specified in the grower/processor contract.

MARKETING ALLOTMENTS

At the beginning of each fiscal year, CCC will 

estimate the domestic human consumption of 

sugar and establish marketing allotments for sugar 

sold for domestic human consumption that has 

been processed from sugarcane, sugar beets or 

in-process beet sugar, whether such sugar beets or 

in-process beet sugar were produced domestically 

or imported. The Secretary will strive to establish 

an overall allotment quantity that results in no 

forfeitures of sugar to CCC under the federal 

Sugar Loan Program and assigns domestic 

producers at least 85 percent of the market share 

of domestic human consumption for the crop 

year. The Secretary shall make estimates of sugar 

consumption, stocks, production and imports for 

a crop year as necessary, but not later than the 

beginning of each of the second through fourth 

quarters of the crop year.

• Beet Sugar: Beet sugar’s allotment is 

derived by multiplying the overall allotment 

quantity for the crop year by 54.35 percent. 

This allotment may only be filled with sugar 

domestically processed from sugar beets or 

in-process beet sugar.

• Cane Sugar: Cane sugar’s allotment is 

derived by multiplying the overall allotment 

by 45.65 percent. Offshore states receive an 

allocation of 325,000 short tons, raw value, of 

cane sugar. Remaining cane sugar is allotted 

to individual mainland cane sugar states. Cane 

sugar’s allotment may only be filled with sugar 

processed from domestically grown sugarcane.

CCC establishes cane state allotments and 

sugarcane processor allocations as mandated by 

regulation. A state cane sugar allotment may be 

filled only with sugar processed from sugarcane 

grown in the state covered by the allotment.

If a sugarcane processor is unable to market 

its allocation, CCC will reassign the estimated 

quantity of the deficit to other processors within 

that state. If after reassignment, the deficit cannot 

be eliminated, CCC will reassign the deficit 

proportionately to allotments for other cane sugar 

states. If this deficit cannot be eliminated, CCC 

will reassign the deficit to CCC for sale of CCC 

sugar inventory unless such sales would have a 

significant effect on the price of sugar. If the deficit 

still has not been eliminated, CCC will reassign 

the remainder to raw cane sugar imports. Likewise, 

if a sugar beet processor is unable to market its 

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allocation, CCC will reassign the deficit to other 

sugar beet processors, then to CCC, and then to 

raw cane sugar imports.

During any crop year or portion thereof for which 

marketing allotments have been established, no 

sugar beet or sugarcane processor shall market a 

quantity of sugar for human consumption in excess 

of the allocation established for such processor, 

except to enable another processor to fulfill an 

allocation or for export. Processors knowingly 

violating their allocation shall be liable to CCC 

for a civil penalty in an amount equal to three 

times the U.S. market value at the time of the 

commission of the violation of that quantity of 

sugar involved in the violation.

SUGAR LOAN FORFEITURES AND THE 

FEEDSTOCK FLEXIBILITY PROGRAM

In order to forestall loan forfeitures, the 2014 

Farm Bill also provides authority for CCC to use 

the Feedstock Flexibility Program to purchase 

sugar and sell it to bioenergy producers. If sugar 

forfeitures occur, the Secretary can dispose 

of the sugar inventory by a sale to bioenergy 

producers, by transfer to sugarcane and sugar beet 

processors under a payment-in-kind program, by 

the buyback of certificates of quota eligibility, or 

by any means permitted for CCC-owned sugar 

before the 2014 Farm Bill was enacted. Unless 

there is an emergency shortage of sugar for human 

consumption, the sugar cannot be sold in a manner 

that increases the supply of sugar available for 

human consumption.

FOR MORE INFORMATION

This fact sheet is for informational purposes only; 

other restrictions may apply. For more program 

details, visit www.fsa.usda.gov or contact your 

local FSA office. To find your local FSA office, 

visit http://offices.usda.gov.

_________________________________________

In accordance with Federal civil rights law and U.S. Department of Agriculture (USDA) civil rights regulations and policies, 

the USDA, its Agencies, offices, and employees, and institutions 

participating in or administering USDA programs are prohibited 

from discriminating based on race, color, national origin, religion, 

sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family/parental status, income 

derived from a public assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in any program 

or activity conducted or funded by USDA (not all bases apply to 

all programs). Remedies and complaint filing deadlines vary by 

program or incident.

Persons with disabilities who require alternative means of communication for program information (e.g., Braille, large print, 

audiotape, American Sign Language, etc.) should contact the 

responsible Agency or USDA’s TARGET Center at (202) 720-2600 

(voice and TTY) or contact USDA through the Federal Relay 

Service at (800) 877-8339. Additionally, program information may 

be made available in languages other than English.

To file a program discrimination complaint, complete the USDA 

Program Discrimination Complaint Form, AD-3027, found online 

at http://www.ascr.usda.gov/complaint_filing_cust.html and at any 

USDA office or write a letter addressed to USDA and provide in 

the letter all of the information requested in the form. To request 

a copy of the complaint form, call (866) 632-9992. Submit your 

completed form or letter to USDA by:

1) mail: U.S. Department of Agriculture Office of the Assistant

 Secretary for Civil Rights 1400 Independence Avenue, SW

 Washington, D.C. 20250-9410;

2) fax: (202) 690-7442; or

3) email: program.intake@usda.gov.

USDA is an equal opportunity provider, employer, and lender.

FACT SHEET

Sugar Loan Program October 2017

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