OBBB Delivers Historic Increase to Sugar Loan Rates

by Dylan Turner 

The One Big Beautiful Bill Act (OBBB), in addition to many other policy changes, provided a substantial increase to loan rates for the sugar loan program. One of the ways that USDA provides direct support to the domestic sugar industry is through the sugar loan program, which is a sector-specific implementation of the more general marketing assistance loans (MALs) that are available for other commodities. MALs, in general, are designed to provide short-term, postharvest financing by allowing the harvested commodity to be pledged as collateral in exchange for a loan at a fixed, crop-specific loan rate. As the costs of producing and storing those crops rise, so will loan rates through periodic updates in the Farm Bill. These loans are typically 9-month nonrecourse loans, meaning the borrower can choose to repay the loan with interest and marketing expenses or forfeit the commodity to the Commodity Credit Corporation (CCC) in satisfaction of the debt. Forfeiture of any pledged sugar can be less costly when sugar prices drop below the relevant loan rate (plus the foregone marketing and interest costs associated with that sugar). However, several other sugar programs are typically used to discourage forfeiture, meaning that the use of this option is rare. The last time sugar loans were forfeited was the 2012/13 marketing year.

These mechanisms mean the sugar loan rate effectively determines the level of price support provided by the program. Since the 1996 Federal Agriculture Improvement and Reform (FAIR) Act initially fixed loan rates at 22.9 cents per pound for refined beet sugar and 18 cents per pound for raw cane sugar, increases in these loan rates have been minimal and infrequent. The 2008 Food, Conservation, and Energy Act lifted the rates to 18.75 cents for raw cane and 23.10 cents for refined beet sugar.  The 2014 Agricultural Act left the rate for cane sugar unchanged and increased the rate for beet sugar to 24.09. The 2018 Farm Bill set the FY 2020–24 rates at 19.75 cents per pound for raw cane sugar and 25.38 cents per pound for refined beet sugar.  Most recently, OBBB provided substantial increases in sugar loan rates, much larger than previous increases. Specifically, loan rates for raw cane sugar were raised from 19.75 cents per pound to 24 cents per pound. Loan rates for refined beet sugar were also amended and fixed at 136.6% of the raw cane sugar rate. In effect, this raised the sugar beet loan rate from 25.38 cents per pound to 32.77 cents per pound (depicted in Figure 1).

Figure 1: Monthly U.S. Sugar Prices, 2000–2025. 

Note: ICE = “Intercontinental Exchange”. Some missing observations are present in 2022 and 2023 due to supply chain issues, leading to refined beet sugar being unquoted due to a lack of spot supplies.

Source: Author construction using data from  the USDA, Economic Research Service’s Sugar and Sweeteners Yearbook Tables and the September 30^th Issue of Sosland Publishing’s weekly Milling and Baking News.

Since 2014, both raw cane sugar and refined beet sugar prices have typically been well above the relevant loan rates. Monthly raw cane sugar futures prices averaged approximately 30 cents per pound during 2014-2024, while refined beet sugar spot prices averaged around 40 cents per pound over the same period.  This meant that market prices would need to fall, on average, by roughly 15 cents per pound (or about 35%) at any point over this period to reach the relevant loan rates. By 2025, sugar prices had declined, particularly for beet sugar, to be much closer to the new loan rates specified under the OBBB. As of September 26,  2025[1], prices for refined beet sugar were quoted at 38 cents per pound, or about 16% above the loan rate set by the OBBB, which took effect October 1.

Related Research and Policy Analysis by ARPC Economists: 

Turner, Dylan, Francis Tsiboe, Shawn Arita, and Sandro Steinbach. “Analysis of the U.S. Sugar Safety Net and Potential Sugar Beet Revenue Protection Program”, ARPC Report 2025-01, Agricultural Risk Policy Center, North Dakota State University, August 8, 2025. https://doi.org/10.22004/ag.econ.364764