King Asks USDA to “Provide Direct Relief to the Biofuels Industry"
Biofuel Caucus letter: COVID-19 “Stay at home” orders are hurting ethanol production and weakening markets by discouraging travel and reducing demand
Washington DC- Congressman Steve King, a member of the Congressional Biofuels Caucus, announces that he has signed a bi-partisan letter to USDA Secretary Sonny Perdue requesting that the USDA use “funds from the CARES Act to provide direct relief to the biofuels industry.” The letter notes that state issued “stay-at-home” orders are hurting ethanol production because markets are being further weakened by reduced demand caused by the inability of consumers to travel.
“A strong biofuels industry is important to both our nation’s physical health and our rural economic health, especially for our grains producers, and we cannot allow it to become another victim to the COVID-19 virus,” said King. “In fact, we are extremely fortunate that biofuels producers have been among the most responsive to our nation’s immediate needs. Many plants are working overtime to produce hand-sanitizer for our hospitals and our first responders, and we must be willing to support them through this challenging time while their fuel markets are being artificially depressed by ‘stay-at-home’ orders.”
The letter to Secretary Perdue, as well as the letters’ 32 Congressional signatories, may be seen here.
For your convenience, a copy of the text of today’s letter has been provided below:
Dear Secretary Perdue,
The Coronavirus Aid, Relief and Economic Security (CARES) Act provided USDA with additional resources to support farm income and prices during this economic downturn. The CARES Act included a reimbursement of $14 billion to the Commodity Credit Corporation (CCC), and $9.5 billion for the Secretary to respond to the economic impacts of COVID-19. As the U.S. Department of Agriculture prepares to address financial hardship in agriculture, we urge you to use funds from the CARES Act to provide direct relief to the biofuels industry.
Demand for fuel is declining as states implement stay-at-home orders and discourage travel. This sudden shift in demand is worsening market conditions to the point ethanol plants are halting production. The biofuels industry is a vital market for the commodities our farmers produce, and USDA must take immediate action to ensure plants can retain skilled workers and continue production when market conditions improve.
The biofuels sector provides a direct and significant boost to the value of corn and soybeans. Ethanol plants purchase two out of every five bushels of U.S. corn and biodiesel producers use over 8 billion pounds of soybean oil a year. Ethanol plants produce dried distillers grains (DDGs) as a byproduct, providing livestock farmers with a low-cost, high-protein component of animal feed. To assist with the response to COVID-19, some ethanol and biofuels plants have volunteered to produce hand sanitizer and disinfectant products to address nationwide shortages. And, ethanol plants produce high purity carbon dioxide that is critical for medical facilities and food processing. The biofuels sector plays a large role in the livelihood of America’s commodity and livestock producers, and biofuels plants are major employers in many rural communities.
USDA should take immediate action to stabilize the biofuels industry with resources provided by the CARES Act. We look forward to working with you on this issue as USDA assists producers through this challenging time. Thank you for considering this request.