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BELLE GLADE -- Although the Sugar Cane Growers Cooperative of
Florida said it expects to forfeit sugar to repay government loans,
the group of 56 farmers is not committed to the action.
"We still view forfeiture as an option of last resort,"
said Barbara Miedema, spokeswoman for the Belle Glade-based
cooperative.
In a letter delivered to the U.S. Department of Agriculture on
Friday, the cooperative said it intends to forfeit the sugar it has
under loan -- estimated to be 150,000 tons worth $53 million at the
time the loans are due. But if prices rise above the forfeiture
range before the loans come due in August and September, the
cooperative would sell the sugar and repay the loans in cash,
Miedema said.
"If we are able to sell sugar in commercial channels, we
will," she said. The price at which forfeiture becomes
attractive is a financial decision made by each company. But the
USDA estimates it to be any price at or below about 19.5 cents a
pound for raw sugar.
Raw sugar prices continue to hover at between 18 cents and 19
cents a pound, despite the federal government's attempt to move the
market by buying $54 million in surplus sugar last month.
Growers intending to forfeit must notify the USDA's Commodity
Credit Corp. at least 30 days before their loans come due. The
cooperative has one loan -- on 11,000 tons of sugar worth $4 million
-- that comes due in August. The bulk of its loans are due in
September.
Miedema said the cooperative chose to notify the government early
to "get the ball rolling." Extensive paperwork is
involved, particularly because growers must arrange to store the
forfeited sugar for the government.
Clewiston-based U.S. Sugar Corp. has 50,000 tons of sugar worth
$18 million under a loan coming due at the end of September. It has
yet to disclose whether it will forfeit.
Florida Crystals Corp. has 220,000 tons of sugar worth $79.2
million under loans due at the end of September. The Palm
Beach-based company has said it will make a decision next month on
whether to forfeit.
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