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BELLE GLADE -- The Sugar Cane Growers Cooperative of Florida has
told the government that it intends to forfeit some of its crop to
satisfy loans that come due this summer.
Made up of 56 small farmers, the cooperative is the first Florida
grower to officially notify the U.S. Department of Agriculture that
it expects to repay part of its government loans in raw sugar
instead of in cash.
Spokeswoman Barbara Miedema said late last week that the co-op
has written to the USDA's Commodity Credit Corp. explaining its plan
to forfeit at least a portion of the $60 million in sugar it has
under loan.
It's unclear how much the cooperative expects to forfeit. Miedema
could not be reached Monday, and the Hendry County Farm Service
Agency office, which handles sugar loans, would not release the
information.
With sugar supplies up and prices down, growers of sugar cane and
sugar beets nationwide expect to turn sugar over to the government
-- something Florida growers last did 15 years ago.
"We fully expect there will be some very large quantities of
sugar forfeited," said Harold Connor, deputy director of the
FSA's price support division.
In fact, Connor said, some Florida growers have asked if they
would be allowed to forfeit before the loans are due. Loans to
Florida growers, which amount to $154 million, come due in August
and September. Because the government pays growers to store their
own forfeited sugar, early turnovers are not likely to be approved,
Connor said.
The Belle Glade-based cooperative, which is building a new
warehouse to store the surplus sugar, has 170,000 tons of sugar
worth $60 million under loan. Palm Beach-based Florida Crystals
Corp. has 220,000 tons worth $79.2 million under loan, while
Clewiston-based U.S. Sugar Corp. has 50,000 tons worth $18 million
under loan.
With raw sugar prices hovering below the forfeiture range of
about 19 cents a pound, it makes economic sense for growers to repay
loans with sugar rather than to sell it at such low prices. Prices
have not moved despite the USDA's effort to boost the market and
head off forfeitures by buying $54 million in surplus sugar last
month.
Because forfeitures appear likely, government representatives met
with Florida growers last month in Belle Glade to review the
paperwork and rules. As government contractors, growers must comply
with reams of regulations, which include posting equal opportunity
employment signs in several languages, said Tim Murray, chief of the
FSA's inventory management branch.
"It's a different world they are entering," Murray
said.
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