Feedstock Flexibility Program not needed during Q2

In Washington, the USDA does not expect to activate the Feedstock Flexibility Program during the second quarter due to sugar prices averaging higher than the loan limit set by the Commodity Credit Corporation. If sugar producers default on their crop loans, they can give the sugar instead of paying back the loan. That sugar can then be sold at a discount to ethanol producers as a cheap feedstock, helping to recuperate some of the government funds spent on the loans. The last time the mechanism was activated was in 2013 but the program was renovated in the 2014 farm bill.