Sugar PIK Diverts 101,833 Acres

December 8, 2000

The payment-in-kind (PIK) program offered sugar beet producers earlier this year resulted in 101, 832.9 acres being diverted from production, USDA announced Thursday. The program offered sugar beet producers the choice of diverting from production a portion of their crop in exchange for sugar held in inventory by USDA. Producers submitted 5,022 acceptable bids to participate in the program.

By reducing this year's harvest, the PIK Program will help reduce government inventory costs, alleviate the current over-supply of sugar resulting from changes in supply conditions, and consequently strengthen sugar prices, according to USDA.

USDA transferred title to 277,349 tons of refined crystalline sugar to participating producers, or their assignees on December 1. The acres diverted from production by the PIK Program represent about 7% of acreage planted to sugar beets. Transfer of this sugar will result in about a $555,000 reduction in monthly storage related outlays. The sugar transferred from government inventory also represents about 7% of the expected fiscal year 2001 domestic sugar production from sugar beets.