Description:
<jats:p> <jats:italic>Sugar supply is managed in the United States to support minimum prices set by law. The 2008 farm bill contains the sugar‐to‐ethanol program to sell surplus sugar to ethanol producers and a program that allows bids from sugar processors. The sugar program is required to run at no net cost to taxpayers. Bids for surplus sugar are analyzed under various scenarios. Sugar processors will outbid ethanol producers given current ethanol prices. At present, surplus sugar bids will not exceed the minimum prices, and the sugar‐to‐ethanol program will not be able to help the government achieve no net program costs.</jats:italic> (<jats:italic>JEL</jats:italic> Q18, Q42, Q48)</jats:p>