Obama's Next 'Sweet' Bailout

Tyler Durden's picture




 

"Clearly, the USDA has made up its mind that Big Sugar is going to trump the American consumer," is how industry exec perceives the news that the government is considerng buying 400,000 tons of sugar, as WSJ reports, to stave off a wave of defaults by sugar processors that borrowed $862 million under a government price-support program. Since these 'loans' were given nine-months ago, sugar prices have plunged 18% - and could leave the government's price-support program with an embarrassing $80 million loss given the additional sugar-to-ethanol purchase losses. Of course, rather than pass on lower prices to a struggling consumer, the government's decision is to avoid a loss for corporations such as American Crystal Sugar Co., Amalgamated Sugar Co. and U.S. Sugar Corp., and, as Sen. Jeanne Shaheen notes "unfairly leaving consumers and businesses on the hook to foot the bill and that is unacceptable." Moar Big Gulps...

 

 

Via WSJ,

The U.S. Department of Agriculture is considering buying 400,000 tons of sugar to stave off a wave of defaults by sugar processors that borrowed $862 million under a government price-support program.

 

The action aims to prop up tumbling U.S. sugar prices, which have fallen 18% since the USDA made the nine-month operations-financing loans beginning in October.

 

...

 

The move would benefit companies that turn sugar beets and sugar cane into granulated sweetener, a business plied by American Crystal Sugar Co., Amalgamated Sugar Co. and U.S. Sugar Corp. The USDA wouldn't say how many companies have received loans, or identify them. U.S. Sugar said it doesn't have any USDA loans outstanding. American Crystal and Amalgamated didn't respond to requests for comment.

 

Higher prices would hit food companies including candy giants Mars Inc., Hershey Co. and Nestlé SA, and could ultimately boost retail food prices, at a time when many consumers are financially stretched.

 

"Clearly, the USDA has made up its mind that Big Sugar is going to trump the American consumer," said Pierson Bob Clair, president and chief executive at Brown & Haley, a confectioner in Tacoma, Wash., that makes Roca butter-crunch candy.

 

The USDA makes loans to sugar processors annually as part of a program that is rooted in the 1934 Sugar Act. The loans are secured with some 4.1 billion pounds, or 2.05 million tons, of sugar that companies expect to produce from the current harvest. That comes to almost a quarter of total U.S. output that the USDA forecasts for this year.

 

...

 

The loan program was designed to operate at no cost to taxpayers. A June 2000 study by the Government Accountability Office, then called the General Accounting Office, estimated the program's cost to the U.S. economy at $700 million in 1996 and $900 million in 1998.

 

The National Confectioners Association, which represents about 350 candy companies, including Mars, Hershey and Nestlé, estimates that the U.S. Sugar Program has cost consumers about $14 billion since the Farm Bill's passage in 2008.

 

...

 

Any defaults on loans this year would be the first test of a provision in the 2008 Farm Bill that requires the USDA to sell forfeited sugar to ethanol producers. Most ethanol in the U.S. is distilled from corn.

 

To entice ethanol producers to buy sugar to mix in with corn, the USDA expects it will have to take a 10-cent loss on every pound of sugar it sells, bringing the total to $80 million if 400,000 tons are purchased, Ms. Fecso said.

 

...

 

"If the USDA has to intervene…we're going to be unfairly leaving consumers and businesses on the hook to foot the bill and that is unacceptable," said Sen. Jeanne Shaheen (D., N.H.), co-sponsor of a bill that would give the USDA more flexibility in handling the sugar program.

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Wed, 03/13/2013 - 10:18 | 3325726 Lost Wages
Lost Wages's picture

This dude needs to be more like Governor Jesse Ventura when I lived in Minnesota and send ME some motherfuckin' checks.

Wed, 03/13/2013 - 10:20 | 3325736 otto skorzeny
otto skorzeny's picture

if you're not an unemployed single black woman w/5 chilluns or a big US company you're SOL

Wed, 03/13/2013 - 10:25 | 3325758 CH1
CH1's picture

The productive class will be looted - there is no other choice.

Wed, 03/13/2013 - 10:36 | 3325808 Surly Bear
Surly Bear's picture

I will forever hold a grudge that Hostess Brands was not bailed out. Twinkies are a better economic indicator than any bank or automobile manufacturer.

Wed, 03/13/2013 - 10:45 | 3325862 NotApplicable
NotApplicable's picture

Umm... they'll be back on the shelves as soon as the bankruptcy is finished.

Like most of America, Hostess had a wholly unsustainable business model.

Tyler wrote about it yesterday.

Wed, 03/13/2013 - 11:47 | 3326082 malikai
malikai's picture

Is it just me, or does anyone else find the surge in sugar price from last friday to be a bit, uh, suspect?

Wed, 03/13/2013 - 13:25 | 3325867 TruthInSunshine
TruthInSunshine's picture

This is awesome. Truly.

It's a taxpayer bailout of sugar refiners who are allegedly at risk of defaulting on their existing taxpayer-backed loans of close to a billion USD as previously provided by BigGov.org.

This is akin...no, wait...it's exactly like the government forcing taxpayers to buy 400,000 tons of sugar at artificially high prices, which will then create higher prices for products for many of these same taxpayers when they buy products containing sugar, in order to ensure that the money the government already forced taxpayers to loan to sugar refineries isn't defaulted on (for now).

"The USDA is considering buying 400,000 tons of sugar in an aim to limit supply and boost prices so that sugar producers can pay back government loans that they’re in danger of defaulting on, the Wall Street Journal reports. The move would be an exercise of an untested provision inserted in the 2008 farm bill called the Feedstock Flexibility Program, which allows the USDA to intervene in the market to raise prices."

Epic. Forward, Komrade Kapitalism!

Wed, 03/13/2013 - 10:46 | 3325868 Manthong
Manthong's picture

Bloomberg needs to ban all sugar related instruments from his terminals.

Wed, 03/13/2013 - 10:53 | 3325896 john39
john39's picture

local government bans sugar....  federal government bails out and subsidizes big sugar...  yeah, it all makes sense.

Wed, 03/13/2013 - 11:18 | 3325963 Pseudo Anonym
Pseudo Anonym's picture

just like tobacco in canada; or perhaps even elsewhere

Wed, 03/13/2013 - 11:17 | 3325882 AlaricBalth
AlaricBalth's picture

The Fanjul family of Florida, owners of a vast sugar conglomerate including Domino Sugar, Florida Crystals and Flo-Sun, is one of the most egregious beneficiaries of federal government largesse. According to OpenSecrets.org, they have contributed hundreds of thousands of dollars to both political parties to ensure that the money continues to flow from the taxpayers into their own lavishly lined pockets. Some of the recipients of Fanjul donations include Barack Obama, Harry Reid, Eric Cantor, Robert Menendez, John Boehner, Alcee Hastings, Debbie Wasserman-Schultz and many more. This family knows how to cover all the bases. Just this past year, equal amounts have been donated to the Dem and Rep National Committees.

http://www.opensecrets.org/usearch/index.php?q=fanjul&searchButt_clean.x...

Wed, 03/13/2013 - 11:28 | 3326006 Hobbleknee
Hobbleknee's picture

Imagine how cheap sugar would be if imports weren't taxed to protect domestic sugar.

Wed, 03/13/2013 - 12:27 | 3326220 tarsubil
tarsubil's picture

Wait. You said they contributed to both political parties? I only see one.

Wed, 03/13/2013 - 16:43 | 3327457 AlaricBalth
AlaricBalth's picture

You are right, of course. I should know better. I stand firmly corrected.
:-/

Wed, 03/13/2013 - 10:57 | 3325902 Dr. Richard Head
Dr. Richard Head's picture

Hence the lack of the productive person's desire to be productive.  I doubled my compensation in 2012 over 2011 and all I got was a fucking HUGE tax bill.  My tax advisor keeps telling me to take advantage of tax breaks in 401K's and such with the mantra of "Pay yourself instead of Uncle Sam."  I corrected him and said Uncle Sam owns that market too, it's just some other schmuck in a suit takes a skim off of that cash first before going right to Uncle Sam.  He looked like a dog hearing a high pitched noise, head all cocked to the side, wide-eyed and shit.

Wed, 03/13/2013 - 10:25 | 3325760 Tsar Pointless
Tsar Pointless's picture

Ridiculous comment of the day.

So a single black woman with as you say "5 chilluns" is somehow financially equatable with a big US company?

You are a sick racist, aren't you? Go ahead, be loud and proud and admit it.

I hope you lose all of your belongings and fortune and have to rely on gubermint aid. Sincerely I do.

Wed, 03/13/2013 - 10:35 | 3325790 otto skorzeny
otto skorzeny's picture

they are both welfare queens suckling at Uncle Sam's dry and cracked teat and feel free to support both with your tax dollars. Sincerely-you're a knee-jerk douchebag that should be posting at HuffPo.

Wed, 03/13/2013 - 10:53 | 3325894 Transitory
Transitory's picture

Thanks, missed that thread. You're saying that indirectly we're all SNAP recipients just by going to the grocery store. Ugh.

Wed, 03/13/2013 - 11:45 | 3326074 Bryan
Wed, 03/13/2013 - 11:00 | 3325903 otto skorzeny
otto skorzeny's picture

this is all part of the problem-if you can't afford an unsubsidized product-YOU SHOULDN'T BUY IT(and that includes using fucking credit cards).or-if you can't afford to run a business without govt "help" YOU SHOULD NOT BE IN BUSINESS. sorry I'm not in your little ZH mutual admiration society HH.

Wed, 03/13/2013 - 11:01 | 3325913 hedgeless_horseman
hedgeless_horseman's picture

 

 

sorry I'm not in your little ZH mutual admiration society HH.

Want some government cheese to go with that whine?

I admire you and appreciate you, Otto, but this is Fight Club. 

 

Wed, 03/13/2013 - 11:03 | 3325920 otto skorzeny
otto skorzeny's picture

you do have your share of sycophants on here

Wed, 03/13/2013 - 12:41 | 3326272 a growing concern
a growing concern's picture

You'll get some love here too once you start posting some photos of delicious, non-horsemeat meals.

Wed, 03/13/2013 - 10:49 | 3325881 Tsar Pointless
Tsar Pointless's picture

Oh, I post there. I trounce those idiots there, too. Those who think that Chairman Ben and Paul Krugman are gods. I am an equal opportunity trouncer.

Otto, admit you're a racist, and move on. Because, I guarantee you - there are thousands of po' white folk in rural areas who get preggers at 15 and suck off of the cracked teat, as well.

Douche.

Wed, 03/13/2013 - 10:55 | 3325898 otto skorzeny
otto skorzeny's picture

care to come up with some hard #s as to the % of babies born to unwed teenaged minorities as opposed to caucasians? how about the % of crimes committed by minorities as opposed to whites? or the % of minorities in prison as opposed to whites? and don't give me that bullshit about the system fucking them over.

Wed, 03/13/2013 - 11:21 | 3325983 DOT
DOT's picture

How about gross amount paid, Otto? After all we are talking about the effect it has on those that pay for it. Focus on the power not the pawn.

Wed, 03/13/2013 - 11:39 | 3326051 Troll Magnet
Troll Magnet's picture

WHO THE FUCK CARES IF OTTO IS A RACIST OR NOT?
jesus fucking christ, dude. people have the right to not like anybody for whatever reasons. we don't live in a fucking kumbaya world. get over your pathetic PC self.

Wed, 03/13/2013 - 12:06 | 3326136 Ricky Bobby
Ricky Bobby's picture

Tsar what a fucking troll idiot. Ouch call me a rayciss - a fate worse then death. Jesus only in the mind of a libtard does the word racist hold any power.

Wed, 03/13/2013 - 12:25 | 3326056 shuckster
shuckster's picture

The White Welfare Queen argument is a media manifestation based on false premises

Wed, 03/13/2013 - 10:36 | 3325801 LFMayor
LFMayor's picture

I'd call him a sick realist.  Emphasis on the realism part.  He's a dick most of the time but he's spot on with this.

and you are a blind, willing little dumbass tool, praying to your diversity and inclusion golden calf.

Just where exactly do you think all that "gubermint aid" fucking comes from?  It just materializes?  Oh, they can print money anytime they need it.  Do you realize that the only reason all these leeches are fed this morning is because we've been coasting along, using up all the inertia supplied by hardworking people over the last 60 years?  Once that inertia is spent we're going to play mad max. 

And all these poor, downtrodden "gubermint aid" beneficiaries that you rise in magnificient defense of are going to fucking use your rib bones to tie up their hair, oh champion of the downtrodden.

Wed, 03/13/2013 - 11:00 | 3325912 McMolotov
McMolotov's picture

+1 for the "rib bones in the hair" visual.

Wed, 03/13/2013 - 11:15 | 3325950 MrButtoMcFarty
Wed, 03/13/2013 - 13:03 | 3326332 Lost My Shorts
Lost My Shorts's picture

Otto is a racist.

He is also Catholic, and acts hurt at the vicious anti-Catholic stuff that gets posted any time the Vatican or pope is mentioned at ZH.  You would think he might learn from that, something.  About how it feels to be on the receiving end of casual hatred.  Maybe the spirit would enter his mind of that hairy no-job hippie from wayback who said "Do unto others bla bla."

Welfare queens have the same impact on the taxpayer regardless of color.  A numerical majority are White, even if the percentage is higher among Blacks.  It was totally gratuitous for Otto to specify black.  He did it because he wants to sow hatred and burn every bridge that might exist in society.  (WWJD)  That is why the USA has no chance.  People like Otto should be trying to build bridges to anyone, of any color, who shares his philosophy.  But instead he sows race hatred, and makes it clear to any black person that they had better stick with Barry-O and PK, because everyone here at ZH hates him and blames him for all the problems.

Wed, 03/13/2013 - 14:46 | 3326832 JOYFUL
JOYFUL's picture

fyi...not much traction generated here by calling out someone as a "racist"....kinda like walking into the ring wearing a chicken suit...might as well bring your own tar...

this here "Otto" is a victim too! Plenty of good folks get catched up in the sionist divide n conquer campaign...set whitey against the fro bros., or the towel heads, throw a match, step back, and steal everybody wallets. Happens all the time.

There's just no way outta this mess till we turn around and look at the dancin & laughin 'raelis behind every punch up. Blacks take a lot of flak for having a culture of dependency...but what would happen if all your best and brightest were targeted for elimination or enticed into addiction\dead end easy money dopin...

the 1960s was all about turning black people away from their real leaders and creating phony values and slick dope culture media memes to break their spirit, and will to get ahead in whitey's world. Smartest blacks left now  are the ones what want nothin to do with us, till we clean up our own act and get rid of the race traitors in our midst.

Then we can all live happily ever after...cept for u no hoo!

Wed, 03/13/2013 - 19:41 | 3327953 mkhs
mkhs's picture

You be dreamin again.

 

Wed, 03/13/2013 - 10:51 | 3325885 NotApplicable
NotApplicable's picture

Gee, talk about a sicko... openly wishing disaster on someone who merely points out various types of welfare queens.

But that's the kind of evil incoherence to be expected by a violent statist looking for a benevolent dictator to "make it all fair."

You can try and justify theft for the benefit of one person over another, but you'll never escape the fact that it relies upon theft, and as such, it UNDERMINES ALL OF SOCIETY.

See, once an action is accepted, it can be applied to ANY goals, like say, massive theft to fund war.

You think you're a do-gooder, but never once look at the evil you perpetrate to achieve your ends.

Or perhaps you're the best troll EVAR? Poe's Law is a bitch, sometimes.

Wed, 03/13/2013 - 12:04 | 3326130 stormsailor
stormsailor's picture

well,  you brought it up but, yeah.   a single minority woman with 5 dependents probably receives in total government largesse, 120,000 a year.  now thats a guess, but i read a report done 4 years ago for minority females with 2 dependents in mississippi and at that time it was the equivalent of 102,000.

 

as much as i hate this fascist corporatocracy corruption.

 

i equally hate the same batch that allow the other.  and the simple fact is there are 10's of thousands of the latter.

 

 

Wed, 03/13/2013 - 10:58 | 3325907 infinity8
infinity8's picture

Most of the welfare queens in my neck of the woods are white. And there's plenty of them.

Wed, 03/13/2013 - 11:28 | 3326007 McMolotov
McMolotov's picture

Obviously black people don't live in the woods.

Wed, 03/13/2013 - 11:55 | 3326106 infinity8
infinity8's picture

multi-generation, expertly home-schooled to achieve their own full plate of "benefits" by the time they turn 18. it's a real career.

Wed, 03/13/2013 - 17:04 | 3327549 de3de8
de3de8's picture

McMolotov,
Tk's for the gut laugh!

Wed, 03/13/2013 - 11:08 | 3325935 marcusfenix
marcusfenix's picture

so your saying that only black women have five chilluns running around sucking at the government teet?

then you need to get out more, cause at least where I live white women are doing it to, so are the Latinos, hell even the Asians are getting into the act...

everybody's doing it, of course it doesn't help that the younger generation of "men" don't have any concept of commitment beyond the first two minutes.

maybe you lead a sheltered life, but this is a affliction that at least from what i've seen, goes way beyond color. 

Wed, 03/13/2013 - 11:43 | 3326068 shuckster
shuckster's picture

Based on your ring kissing of government and big media talking points, I'd wager you are on the government tit as we speak

Wed, 03/13/2013 - 12:03 | 3326127 marcusfenix
marcusfenix's picture

so my personal observations made in the area in which I live are now "big media talking points"?

why is that, because they don't line up with your personal world view?

and what would it matter if I was on the tit, according to your above comment that's ok, because I'm white I have the "moral high-ground" right?

that is what you said.

and how does expressing an opinion on a subject become "government ring kissing", I suppose a real hardcore freedom fighter has to think, talk and sound like you...

I would guess you consider yourself a "real American" by the comment you posted further up on this thread but I've got to wonder, what boat did your ancestors come off of?

Wed, 03/13/2013 - 12:34 | 3326167 shuckster
shuckster's picture

Its called talking your book. Whichever position you support, generally, they are your paymasters. If you are using liberal talking points, its probably because you are receiving checks from the government

Wed, 03/13/2013 - 12:59 | 3326323 marcusfenix
marcusfenix's picture

first I'm not using liberal talking points, my comment once again, was based purely on personal observation about the area in which I live.

what about that do you not understand?

my "paymaster" is a shipping/receiving warehouse and distribution center and not politically aligned beyond the personal views of those that work there (we are non- union). 

if you were to read any of my past comments on ZH you would see that I am clearly not a supporter of either the fake left or right positions that exist in this country. it's all just part of the PTB's social engineering program which has been probably been going on since your ancestors came off the boat from Europe. Obama, for example, is nothing more then the same empty suit teleprompter reading mouthpiece that Bush was before him.

they all have the same paymasters and as much as people like to label them (and by extension themselves) democrat or Republican, conservative or liberal ect. it's all just a well managed puppet show and the adherents to this paradigm are living a blue pill fantasy. I am well aware, maybe even more than most,of how far the media continues to go to protect and propagate this lie to which sadly many Americans continue to cling to. 

as far as showing respect, my ancestors came here from Russia and built the society you now call home. you should show some respect.

 

 

Wed, 03/13/2013 - 14:09 | 3326548 stormsailor
stormsailor's picture

yeah, see black women have chilluns,  white women have youngins, lol

Wed, 03/13/2013 - 11:02 | 3325919 Groundhog Day
Groundhog Day's picture

No losses for corporations period.  Isn't capitalism grand 

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