May 11, 2020
A group of 11 ag and biofuel groups sent a letter to House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell on May 11 asking congress to provide COVID-19 relief for ethanol and biodiesel producers.
“The situation we face is dire,” the groups wrote. “More than 130 biofuel plants have already partially or fully shut down as motor fuel demand plunged to 50-year lows. America’s biofuel plants purchase annually more than one-third of U.S. corn and U.S. soybean oil, and the loss of those markets has depressed farm income and will continue to push corn and soybean prices down dramatically.
“The damage has rippled across the entire agricultural supply chain,” the continued. “Ethanol plants are the top supplier of carbon dioxide (CO2) to the food industry, and shutdowns have triggered commercial CO2 supply shortages, inhibiting the ability of our food and beverage sector to manufacture, preserve and supply food. Biodiesel plants provide critical demand for soybean oil, distillers corn oil, animal fats from livestock production, and recycled oils from restaurants. Reduced demand for these oil byproducts will result in higher prices for livestock feed and ultimately higher prices for consumers. And shortages of dried distiller grains (DDGs)—a high-protein animal feed produced by ethanol plants—are already impacting livestock rations and meat prices.”
The letter notes that biofuel producers are doing what they can to support the public health response by repurposing ethanol and glycerin supplies to produce hand sanitizer. “However, sanitizer markets are not nearly substantial enough to sustain our workforce and bridge the industry through the crisis,” the groups said.
The letter states that some facilities are eligible for CARES Act loan programs, but stresses that the legislation did not include specific relief for biofuel producers. In addition, the USDA’s subsequent disbursement of Commodity Credit Corp. funds excluded the biofuel sector despite letters of support sent to Agriculture Secretary Sonny Perdue by broad, bipartisan coalitions in the House and Senate.
“While it is important that biofuel producers are included in any infrastructure or tax legislation designed to hasten America’s long-term economic recovery from COVID-19, relief is needed now to ensure these producers are positioned to bring renewable fuel production back online when conditions improve,” the groups wrote. “It is vital that the next COVID-19 relief package include immediate, temporary, and direct assistance to help the U.S. biofuel industry retain its skilled workforce and mitigate the impact of plant closures on the food and feed supply chain and rural communities. There are numerous mechanisms overseen by the USDA that could quickly facilitate direct assistance to the biofuel industry. Preserving the vital biofuels market for farmers supports long-term demand for agriculture and farm sector recovery.”
The letter is signed by the Renewable Fuels Association, Growth Energy, National Biodiesel Board, Farm Bureau, National Corn Growers Association, American Soybean Association, National Farmers Union, National Oilseed Processors Association, National Renderers Association, National Sorghum Producers, and Fuels America. A full copy of the letter is available on the Fuels America website.
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