The Agriculture Department announced last week that the Commodity Credit Corporation will offer 100,000 tons of sugar to ethanol producers on July 30.

Ethanol companies will be allowed to buy between 20 tons and 10,000 tons, but companies must use any sugar they purchase as "an accelerator" to produce ethanol, according to the USDA..

Sugar lots for sale are listed in a CCC catalog and broken down by eight storage regions. Fourteen percent of the sugar listed in the catalog is located in Magic Valley at the two Amalgamated Sugar Company factories.

The CCC will announce successful bids on July 31.

Sugar to be sold is forfeited sugar, owned by USDA, said Mark Duffin, executive director of Idaho Sugarbeet Growers Association. USDA has 700,000 tons of surplus sugar, which has been forfeited because of the guaranteed minimum price to the grower, he said.

Although 100,000 tons is not a lot of sugar, it is a step in the right direction, he added.

"There is a tremendous potential for the ethanol market," Duffin said.

Sugar can be used with corn to make ethanol more efficient, he said. In addition, California requires additives in fuel to help it burn cleaner. The additive used for years -- MBTE -- was found to be polluting groundwater and has been banned, and fuel companies are turning to ethanol.

"We will probably see requirements in other areas for an alternative," Duffin said.

The government supply of sugar, essentially an oversupply, keeps the price depressed, he said.

"The sooner the government can get that off the market the sooner the prices should respond. We are pleased to see the government is trying to market sugar."

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What is the Commodity Credit Corporation?
* a government entity created to stabilize, support, and protect farm income and prices.

* helps maintain balanced and adequate supplies of agricultural commodities and aids in their orderly distribution.

* aids producers through loans, purchases, payments and other operations, and makes available materials and facilities required in the production and marketing of agricultural commodities.

* authorizes the sale of agricultural commodities to other government agencies and to foreign governments and the donation of food to domestic, foreign, or international relief agencies.

* assists in the development of new domestic and foreign markets and marketing facilities for agricultural commodities.

Source: Farm Service Agency