Release No. 1429.06

WASHINGTON, March 22, 2006 - The U.S. Department of Agriculture's Commodity Credit Corporation (CCC) today announced the allocation of the Feb. 2, 2006, Overall Allotment Quantity (OAQ) increase for cane-producing states, sugarcane processors and sugar beet processors. CCC also announced the allocation of the 225,000 ton OAQ increase to cane producers, previously published Sept. 29, 2005.

The Beet Sector

CCC announced an OAQ increase of 525,000 short tons, raw value (STRV) on Feb. 2, 2006, then distributed the beet sector share (46.35 percent) to all beet processors based on historic fixed shares. CCC also reassigned the Pacific Northwest Sugar Company's allocation held in reserve, 129,096 STRV, to the American Crystal Sugar Company, consistent with the decision and order issued by USDA's Judicial Officer on March 3, 2006. This allocation of the fiscal year (FY) 2006 beet sugar marketing allotment had been held in reserve pending the Judicial Officer's decision.

CCC compared new processor allocation levels to the latest company supply forecasts to reassign allocations from companies with marketing allocation surplus to companies with inadequate allocation. After company reassignments, CCC determined that the beet sector would still be unable to fill 242,000 STRV of its OAQ sector increase, so this amount was reassigned to imports.

The Cane Sector

On Aug. 19, 2005, USDA announced the initial OAQ of 8,600,000 STRV. An expected 120,000 STRV of cane supply shortfall was reassigned to imports. Cane processors received the allocation for the balance (3,805,900 STRV) of the cane sector allotment.

Since then, the FY 2006 OAQ increased 225,000 STRV on Sept. 30, 2005, and 525,000 on Feb. 2, 2006. These two OAQ changes increase the cane sector allotment by 342,375 tons. The increase in the cane sector allotment, coupled with expectations of a cane sector shortfall, resulted in three more reassignments from the cane sector to imports totaling 984,000 STRV. USDA today announced cane state allotments and cane processors allocations to incorporate all changes.

After determining that Hawaii and Puerto Rico would be unable to use any of the OAQ sector increase, USDA allocated the entire cane sector allotment to the Mainland cane states (Florida, Louisiana, Texas) based on fixed cane state shares. USDA allocated cane state increases to processors within each state based on fixed processor shares. All sugarcane processors had sugar marketing allocations greater than their total supply. In aggregate, USDA concludes that the cane sector will not be able to fill 984,000 STRV of its allotment, an amount now reassigned to imports.

FY 2006 cane state allotments and sugarcane and sugar beet processor allocations are located here.

FSA news releases and media advisories are available here.