Corn Growers Worry About Sugar Purchases

April 21, 2000

The National Corn Growers Association is concerned about USDA’s possible plant to purchase sugar and divert it to ethanol production. That will displace corn and have a negative effect on corn prices and carryover stocks, says NCGA.

To avoid potential sugar loan forfeitures later this year, USDA is considering purchasing 300,000 tons of sugar and selling it to ethanol producers for a fraction of the cost to taxpayers, says NCGA. The 300,000 tons of sugar could produce 45-50 million gallons of ethanol.

"If there is not additional demand for this ethanol, approximately 18-20 million bushels of corn will be displaced and added to carryover stocks, lowering corn prices by about one cent per bushel and reducing corn cash receipts by $100 million," NCGA adds.

In a letter to Agriculture Secretary Dan Glickman, NCGA President Lynn Jensen said, "We strongly urge you to refrain from enacting this disposal plan unless some provisions for definite market growth can be demonstrated and displacement of corn can be prevented."

NCGA wants USDA to create additional ethanol demand by denying California’s request for a waiver from the Clean Air Act’s oxygenate requirement for reformulated gasoline, and move aggressively to open markets for corn sweetener exports to Mexico.