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USDA announces sugar program details

The move follows an Aug. 13 announcement by USDA establishing an overall allotment quantity or OAQ of 8.55 million short tons or STRV. The latest announcement follows the requirements of the 2002 farm bill to allocate the OAQ to cane producing states and both cane and beet sugar processors.

In making the announcement, USDA is allocating 96.5 percent of the 8.550 million ton OAQ. USDA cited continued uncertainties surrounding total sugar use and beet and cane production forecasts as reasons for the partial allocation.

New market information became available in the Sept. 11, 2003 USDA World Agricultural Supply and Demand Estimates report. Revisions to both 2002 and 2003 total sugar use and to 2003 production resulted in the following FY2004 supply/use forecast:

(000 STRV)
Carry-in stocks 1,691
Production 8,812
Imports 1,584
Total Use 10,075
Ending Stocks

The forecast ending stocks of 2.012 million STRV result in an ending stocks-to-use ratio of 20 percent in the absence of marketing allotments and a free stocks-to-use ratio of 17.4 percent with the previously announced OAQ.

This latter ratio, up from 15.1 percent when the OAQ was established, is the result of a change in the WASDE report's forecast of total use and beginning stocks in FY 2004. Because this change occurred after the issuance of the initial FY 2004 OAQ, USDA is allocating only 96.5 percent of the OAQ at this time.

This produces a free stocks-to-use ratio closer to levels associated with a more balanced market.

USDA officials said they will closely monitor stocks, consumption, imports, and all other program variables on an ongoing basis and will release the remaining 300,000 tons of the OAQ if market conditions warrant.

An OAQ of 8.550 million STRV resulted in the following allocations to the sugar sectors:

(000 STRV)
Beet Sugar 4,647
Cane Sugar 3,903

The latest allocation of 96.5 percent results in allocations of 4.484 million STRV and 3.766 million STRV for the beet and cane sectors, respectively.

As specified in USDA regulations, cane state allotments and processor allocations are established by assigning weights of 25 percent, 25 percent and 50 percent, respectively, to the three-factor criteria: past marketings; processing capacity; and ability to market. Because Puerto Rico forecast zero production for the 2003 crop, its FY 2004 allotment is reassigned to all other cane processors based on their respective share of the cane allotment.

Proportionate shares relative to the acreage of sugarcane that may be harvested in Louisiana for sugar or seed has been calculated at 84.2 percent of each farm's sugarcane acreage base.

USDA allocated the beet sector allotment as directed by statute to each processor based on their share of domestic beet sugar production during the 1998 through 2000 crop years.

These actions apply to all domestic sugar marketed for human consumption in the United States from Oct. 1, 2003, through Sept. 30, 2004.

The 2003-crop sugar marketing allotments and allocations are as follows:


Initial Allocation Reassignment of Puerto Rican Allotment to the Cane Sector Beginning FY04 Allotments/Allocations

(short tons, raw value)
Beet Sugar 4,646,925 4,646,925
Cane Sugar 3,903,075 3,903,075
TOTAL OAQ 8,550,000 8,550,000
Allotment Available to Beet 4,483,875 4,483,875
Allotment Available to Cane 3,766,125 3,766,125
8,250,000 8,250,000


Florida 1,874,073 3,013 1,877,086
Louisiana 1,409,688 2,266>/td> 1,411,954
Texas 157,364 253 157,617
Hawaii 318,956 513 319,468
Puerto Rico 6,044 -6,044 0
TOTAL CANE SUGAR 3,766,125 0 3,766,125


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