WASHINGTON, DC-Agriculture Secretary Dan Glickman announced today that the U.S. Department of Agriculture's Commodity Credit Corporation (CCC) will buy U.S. sugar to reduce the cost of expected sugar program loan forfeitures, support sugar growers and help stabilize low market prices. The CCC will seek to buy approximately 150,000 tons of sugar, at least 75 percent of which will be refined sugar.
Domestic prices that U.S. sugar producers receive have fallen 25 percent over the past year due to excessive supplies of sugar. Good weather, productivity improvements, expanded plantings and increased imports of sugar from other countries contributed to the oversupply of sugar. In taking this short-term action to discourage forfeitures and reduce CCC costs, Glickman also challenged the sugar industry to reform its program.
"We expect the sugar industry to rapidly develop conservation and production options that can form the basis of a sustainable sugar policy," Glickman said. "Simply relying on continued government purchases over the longer term is neither feasible nor realistic."
In addition, Glickman urged sugar growers and processors to voluntarily increase their participation in USDA's Conservation Reserve Program.
The CCC will purchase the sugar using its authority under the cost reduction option of the Food Security Act of 1985. The CCC plans to store the purchased sugar and will not sell it back into a depressed U.S. sugar market. Additional purchases may occur in the future, depending on price and market conditions.