C.F.R. » Title 7 » CHAPTER XIV—COMMODITY CREDIT CORPORATION, DEPARTMENT OF AGRICULTURE › SUBCHAPTER B—LOANS, PURCHASES, AND OTHER OPERATIONS › PART 1435—SUGAR PROGRAM › Subpart B—Sugar Loan Program

7 C.F.R. § 1435.105

Loan settlement and foreclosure

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(a) A processor may, any time before loan maturity, redeem all or any part of the loan collateral by paying CCC the applicable principal and interest.

(b) Forfeiture of sugar loan collateral will be accepted as payment in full of the principal and interest due under a nonrecourse loan, subject to applicable premiums and discounts based on the difference between specifications reported on the sugar loan certification report and actual loadout characteristics.

(c)(1) Forfeiture of in-process sugar serving as loan collateral will be accepted as payment in full of principal and interest if the processor converts the in-process sugar into raw cane sugar or refined beet sugar of acceptable grade and quality for sugar eligible for loans within 1 month of loan maturity.

(2) The in-process sugar must be fully processed into raw cane sugar or refined beet sugar, before the processor shall transfer the sugar to CCC.

(3) On transfer of the sugar, CCC shall make a payment to the processor in an amount equal to the amount obtained by multiplying the difference between the loan rate for raw cane sugar or refined beet sugar, as appropriate, and the in-process loan rate the processor received by the quantity of sugar transferred to CCC. The loan agreement shall specify the quantity of sugar that can be forfeited to CCC.

(d) If the processor does not forfeit the collateral, but instead further processes the in-process sugar into raw cane sugar or refined beet sugar and repays the loan on the in-process sugar:

(1) the processor may obtain a loan for the raw cane sugar or refined beet sugar, as appropriate, and

(2) the term of a loan made under this subsection for a quantity of in-process sugar, when combined with the term of a loan made for the raw cane sugar or refined beet sugar derived from the in-process sugar, may not exceed 9 months.

(e) CCC shall not accept delivery of sugar in settlement of a nonrecourse loan in excess of the quantity of sugar that is shown on the note and security agreement minus any quantity that was redeemed or released for removal under this section.

(f) If the processor does not redeem any of the nonrecourse loan collateral, title to the unredeemed nonrecourse loan collateral as described in the note and security agreement will, without further CCC or processor action transfer to CCC in-store at the CCC-approved warehouse at 12 a.m. the next business day following the maturity date of the loan. Title, all rights, and interest to such sugar shall immediately vest in CCC.

(g) The value of the settlement of loans shall be made by CCC according to the CCC schedule of premiums and discounts.

(h) CCC may, at any time, accelerate the date for loan repayment including interest. CCC will give the processor notice of such acceleration at least 15 days in advance of the accelerated loan maturity date.

(i) If a processor's nonrecourse loan indebtedness is not satisfied under the provisions of this section or if forfeited in-process sugar is not converted to raw or refined sugar within the prescribed time:

(1) Interest on the processor's indebtedness shall accrue as specified in part 3 of this title and shall accrue until the debt is paid;

(2) CCC may, upon notice, with or without removing the collateral from storage, sell such collateral at either a public or private sale;

(3) The processor shall be liable for the deficiency if the net proceeds are less than the amount of principal, interest, and any other charges CCC incurs; and

(4) If the processor forfeits the in-process sugar loan collateral but does not transfer raw or refined sugar of suitable quality to CCC within 1 month, CCC will charge liquidated damages, as provided in the loan agreement.

(j) The CCC rates for the storage of forfeited sugar to approved warehouses for the 2025 crop year and each subsequent crop year will be at least:

(1) For refined sugar, 34 cents per hundredweight per month; and

(2) For raw cane sugar, 27 cents per hundredweight per month.

(3) For each of the 2012 through 2024 crop years, CCC shall establish rates for the storage of forfeited sugar in the same manner as was used on the day before the date of July 9, 2026.

(4) For sugar located in space not approved by CCC for storage, the payment rate will be zero until such time as the processor delivers such sugar to a CCC-approved warehouse or a location agreed to by CCC and the warehouse operator, accordance with the Sugar Storage Agreement.

[67 FR 54928, Aug. 26, 2002, as amended at 74 FR 15364, Apr. 6, 2009; 91 FR 42334, July 9, 2026]
Notes of Decisions
Cited in 5 cases, 2003–2006 · leading case: Holly Sugar Corp v. Johanns, Mike, 437 F.3d 1210 (D.C. Cir. 2006).
Sort: Relevance Newest Treatment
Holly Sugar Corp v. Johanns, Mike, 437 F.3d 1210 (D.C. Cir. 2006). “See 7 C.F.R. § 1435.105 (b). Thus, if the price of raw cane sugar falls below 18 cents per pound, the processors simply default on the loan, .”
Bair v. Pac. Nw. Sugar Co. LLC, 85 F. App'x 555 (9th Cir. 2003). · cites it 7× “” The Growers also focus on 7 C.F.R. § 1435.105 (b) (2000), which states, If there are any hens or encumbrances on sugar pledged as collateral for a loan, the processor must obtain waivers that fully protect CCC’s interest even though the hens or encumbrances are satisfied from…”
Holly Sugar Corp. v. Veneman, 355 F. Supp. 2d 181 (D.D.C. 2005). “7 C.F.R. § 1435.105 . The purpose of such loans are to help stabilize, support and protect farm income and prices and for the "maintenance of balanced and adequate supplies of agricultural commodities .”
Holly Sugar Corp. v. Veneman, 335 F. Supp. 2d 100 (D.D.C. 2004). “7 C.F.R. § 1435.105 . The purpose of such loans are to help stabilize, support and protect farm income and prices and for the "maintenance of balanced and adequate supplies of agricultural commodities .”
Bair v. Pac. Nw. Sugar Co., 75 F. App'x 654 (9th Cir. 2003). · cites it 7× “” The Growers also focus on 7 C.F.R. § 1435.105 (b) (2000), which states, If there are any liens or encumbrances on sugar pledged as collateral for a loan, the processor must obtain waivers that fully protect CCC’s interest even though the liens or encumbrances are satisfied…”
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