| WASHINGTON (AP) -- Care for some sugar? The government has
plenty on hand now that processors have turned over nearly a million tons
rather than try to sell it themselves at a loss.
The sugar was held as collateral under federal price-support loans.
Processors are allowed to forfeit the sugar rather than repay the loans
when domestic prices fall below the loans' value, as they have this year.
The Agriculture Department said on Wednesday that more than 804,000
tons, worth $321 million, were forfeited to the government this week.
Another 155,000 tons were surrendered earlier.
Since the early 1980s, USDA has avoided forfeitures by keeping imports
low enough to stabilize domestic prices, but prices have been driven down
this year because of big increases in U.S. production and other factors.
Some of the government's sugar, about 290,000 tons, will be given to
farmers who have pledged to destroy an equivalent amount of this year's
crop in a program to reduce the surplus. The department hasn't decided
what to do with the rest, said spokeswoman Mary Beth Schultheis.
The department purchased 141,000 tons of sugar this spring in a futile
effort to prop up prices and avoid the forfeitures. That sugar, plus the
forfeited amount, brings the government's total stock to 1.1 million tons.
Storing the sugar will cost taxpayers more than $2 million a month. But
the government could recover the cost of the sugar by waiting for prices
to rise and then selling it, said Jack Roney, chief economist for the
American Sugar Alliance.
"It would enable USDA to not only dispose of the sugar, but also
enable them to make a profit on the entire transaction," he said. |