E9-21761. Domestic Sugar Program-2008-Crop Cane Sugar and Beet Sugar Marketing Allotments and Company Allocations

AGENCY:

Commodity Credit Corporation, USDA.

ACTION:

Notice.

SUMMARY:

The Commodity Credit Corporation (CCC) is issuing this notice to publish the 2008-crop state sugar marketing allotments and company allocations to sugarcane and sugar beet processors, and changes to allotments that have occurred since the establishment of the fiscal year 2009 (FY 2009) overall allotment quantity (OAQ). This applies to all domestic sugar marketed for human consumption in the United States from October 1, 2008 through September 30, 2009. Although CCC already has announced most of the information in this notice through United States Department of Agriculture (USDA) news releases, CCC is required to publish the determinations establishing, adjusting, or suspending sugar marketing allotments.

FOR FURTHER INFORMATION CONTACT:

Barbara Fecso, Dairy and Sweeteners Analysis Group, Economic Policy and Analysis Staff, Farm Service Agency, USDA, 1400 Independence Avenue, SW., STOP 0516, Washington, DC 20250-0516; telephone [phone]; FAX [phone]; e-mail: [e-mail].

SUPPLEMENTARY INFORMATION:

Initial FY 2009 State Allotments and Company Allocations

On September 30, 2008, CCC announced the distribution of the FY 2009 beet sugar allotment of 4,850,738 short tons, raw value (STRV) (54.35 percent of the OAQ) to sugar beet processors. In addition, CCC announced the distribution to sugarcane processors of the 4,074,262 STRV cane sugar allotment (45.65 percent of the OAQ).

CCC also granted Andino Energy Enterprises, L.L.C. (Andino) a FY 2009 cane sugar allocation of 25,266 STRV. This amount represented Andino's expected FY 2009 sugar production based on evidence provided to CCC demonstrating its ability to process, produce, and market 2008-crop raw cane sugar at its St. James Factory. CCC did not reduce allocations at the other Louisiana mills at that time because the FY 2009 raw cane sugar allotment was expected to be considerably larger than the domestic raw cane sugar supply. Instead, CCC filled Andino's allocation need with surplus allotment expected from Hawaii. CCC will determine the permanent allocation level for Andino, and subtract allocation shares, on a pro rata basis, from the Louisiana mills when the time period opens in May for growers to request to transfer allocations.

In FY 2004, CCC declared that Puerto Rican processors permanently terminated operations because no sugar had been processed for two complete years. Since Puerto Rico is entitled to an allocation by law, the allocation of 6,356 STRV was reassigned to the mainland sugarcane-producing states. Hawaii was not expected to use all of its current cane sugar allotment. Therefore, Hawaii received none of the Puerto Rican reassignment and CCC reassigned 25,266 tons of Hawaiian allocation to Andino.

CCC determined that proportionate shares were not necessary in Louisiana in FY 2009 because the cane sugar sector was not expected to fill its allotment.

Additionally, based on the September 2008 World Agricultural Supply and Demand Estimates report (WASDE) indicating a FY 2009 ending stocks-to-use ratio of 4.6 percent, CCC determined that there would be no sugar available to implement provisions of the Feedstock Flexibility Program (FFP) in FY 2009. At this level, the prospect for sugar forfeitures in FY 2009, which triggers FFP, was determined to be very small.

First FY 2009 Reassignment of State Allotments and Company Allocations

In mid-year, CCC reviewed current inventories, estimated production, expected marketings, and other factors affecting a sugar beet or sugarcane processor's ability to market its full allocation. In a May 19, 2009, news release, CCC announced the reassignment of projected surplus beet sugar and cane sugar marketing allotments and allocations under the FY 2009 Sugar Marketing Allotment program. The reassignment, which transferred allocations from processors with inadequate supply to fulfill their allocations to processors with production in excess of their allocations, was expected to substantially increase the available supplies of domestically produced refined beet sugar.

CCC also announced the redistribution of a portion of the American Crystal Sugar Company's allocation to the other sugar beet processors in response to legal proceedings contesting the transfer of sugar marketing allocation from the Pacific Northwest Sugar Company to the American Crystal Sugar Company. The redistribution is considered a “permanent” allotment transfer for future years. The legal proceedings resulted in an 82,425 ton net decrease in American Crystal Sugar's allocation, and a corresponding increase, on a pro-rata basis, to the other sugar beet processors.

As part of the domestic sugar program, CCC is required to reassign allocation to raw cane sugar imports if it is determined that processors will be unable to market their allocations and there is no CCC inventory. Data supplied by the processors in May 2009 indicated that the beet sugar sector would be unable to market 198,073 tons of its current sugar marketing allotment, while the raw cane sugar sector would be unable to market 561,510 tons of its sugar marketing allotment. Hence, the allotments were reduced to 4,652,664 tons for beet sugar and 3,512,752 tons for cane sugar, while 759,583 tons were reassigned to raw cane sugar imports already displayed in the WASDE report. It was expected at that time that further reassignments would be likely.

FY 2009 OAQ Increase

This notice also announces an increase in the FY 2009 OAQ to 9,235,250 million tons, which is 85 percent of the demand estimate published in the August 2009 WASDE report. The latest production forecasts indicate that the beet sugar sector is unable to fill 77,621 tons of its sugar marketing allotment, while the cane sugar sector is 171,417 tons short of filling its sugar marketing allotment. The total surplus allotment of 249,039 tons is reassigned to raw cane sugar imports already included in the WASDE report. CCC is reassigning the surplus allotment to raw sugar imports already expected because no additional raw sugar imports beyond the level already expected are needed at this time.

The current 2008-crop beet sugar and cane sugar marketing allotments to date are listed in the following table:

FY 2009 Overall Beet Sugar and Cane Sugar Allotments and Allocations

Distribution	9/30/2008 Announcement	5/19/2009 Announcement			9/8/2009 Announcement
	Initial allocation	Redistribution of PNW	Reassignments	FY 2009 adjustment 5/19/2009	Adjusted OAQ due to change in food use	Reassignments	FY 2009 adjustment 9/8/2009
	short tons, raw value
Beet Sugar	4,850,738	0	−198,073	4,652,664	168,621	−77,621	4,743,664
Cane Sugar	4,074,262	0	−561,510	3,512,752	141,629	−171,417	3,482,964
Reassignment to Imports	0	0	759,583	759,583	0	249,039	1,008,622
Total OAQ	8,925,000	0	0	8,925,000	310,250	0	9,235,250
Sugar Beet Processors' Allocations:
Amalgamated Sugar Co	1,010,626	27,954	−241,742	796,838	36,103	14,722	847,663
American Crystal Sugar Co	1,865,642	−82,425	104,646	1,887,863	62,167	−62,278	1,887,751
Michigan Sugar Co	487,479	13,484	127,681	628,643	17,414	9,389	655,446
Minn-Dak Farmers Co-op	302,624	8,371	−69,068	241,927	10,811	−15,512	237,226
So. Minn Beet Sugar Co-op	637,074	17,621	−99,306	555,389	22,758	−21,550	556,597
Western Sugar Co	482,583	13,206	−18,494	477,295	17,056	112	494,462
Wyoming Sugar Co	64,710	1,790	−1,790	64,711	2,312	−2,504	64,518
Total Beet Sugar	4,850,738	0	−198,073	4,652,664	168,621	−77,621	4,743,664
State Cane Sugar Allotments:
Florida	2,018,559		−427,364	1,591,196	70,369	−70,369	1,591,196
Louisiana	1,586,848		−50,236	1,536,612	54,438	−54,438	1,536,612
Texas	175,477		−21,284	154,193	6,117	−6,117	154,193
Hawaii	293,378		−62,626	230,752	10,705	−40,493	200,964
Total Cane Sugar	4,074,262		−561,510	3,512,752	141,629	−171,417	3,482,964
Sugarcane Processors' Allocations:
Florida:
Florida Crystals	831,094		−195,131	635,963	28,973	−28,973	635,963
Growers Co-op. of FL	363,109		−61,292	301,817	12,658	−12,658	301,817
U.S. Sugar Corp	824,356		−170,941	653,416	28,738	−28,738	653,416
Total	2,018,559		−427,364	1,591,196	70,369	−70,369	1,591,196
Louisiana:
Alma Plantation	130,959		39,847	170,806	4,565	−4,565	170,806
Cajun Sugar Co-op	157,902		−37,601	120,301	5,505	−5,505	120,301
Cora-Texas Mfg. Co	171,921		19,644	191,565	5,993	−5,993	191,565
Lafourche Sugars Corp	108,896		−12,060	96,837	3,796	−3,796	96,837
Louisiana Sugarcane Co-op	120,075		599	120,674	4,186	−4,186	120,674
Lula Westfield, LLC	234,165		−8,554	225,611	8,163	−8,163	225,611
M.A. Patout & Sons	478,609		−21,951	456,658	16,685	−16,685	456,658
St. Mary Sugar Co-op	159,055		−21,895	137,160	5,545	−5,545	137,160
Andino Energy	25,266		−8,266	17,000	0	0	17,000
Total	1,586,848		−50,236	1,536,612	54,438	−54,438	1,536,612
Texas:
Rio Grande Valley	175,477		−21,284	154,193	6,117	−6,117	154,193
Hawaii:
Gay & Robinson, Inc	67,345		−5,594	61,751	2,457	−8,196	56,013
Hawaiian Commercial & Sugar Company	226,033		−57,033	169,000	8,247	−32,296	144,951
Total	293,378		−62,626	230,752	10,705	−40,493	200,964

Signed in Washington, DC on September 2, 2009.

Jonathan W. Coppess,

Executive Vice President, Commodity Credit Corporation.