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STEAMBOAT SPRINGS, Colorado (Dow Jones)--A recently
announced U.S. government program to help the domestic sugar
industry could remove as much as 300,000 tons of sugar in
2000-01, industry experts told Dow Jones Newswires Monday.
The plan, announced last week by the U.S. Department of
Agriculture, calls for a payment-in-kind (PIK) program under
which the USDA will pay sugarbeet farmers up to $20,000 in
government owned sugar to destroy a portion of their crop, a
move designed to help the sugar industry, hurting from
depressed prices and excess supplies. The producers may then
sell the sugar to processors for profits.
However, for the total potential removal of 300,000 tons
of sugar, the sugarbeet producers - the majority of which
are expected to participate in the scheme - will have to be
released from contractual obligations they have with sugar
processors, cautions Dalton Yancey, who represents a large
number of sugar producers in Washington, including growers
from Florida and Hawaii.
He, like many of the 400 participants in the 17th
International Sweeteners Sympsium in this resort town in
Northwest Colorado, agree that the USDA move points to the
continue support farmers have received from Washington, as
the U.S. industry faces the lowest prices in 22 years.
By contrast, world sugar prices have more than doubled in
the last five months, thanks to an expected world sugar
deficit in 2000-01.
Many of the participants here, including producers and a
vast array of industry experts and politicians, remain
optimistic the USDA will also repurchase more sugar from the
farmers, before the latter default on more loans issued by
the government this year.
The USDA has issued loans, with sugar as collateral, for
some 1.2 millions short tons of sugar so far this year,
worth $550.0 million. The prospect of defaults - and thereby
sugar forfeitures - was increased last week, after
Utah-based Amalgamated Sugar Corp. forfeited 42,000 tons of
sugar.
Larry Corry, Almagamated's president and chief executive
officer reiterated Monday the company "is likely"
to forfeit more sugar later this year, a move that will keep
the USDA busy trying to assuage the producers' ills. |