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National & World Ag News Headlines |
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Senators Call on USDA for More Funds to Biofuel Industry
USAgNet - 04/08/2020
Senators Chuck Grassley (R-Iowa), Tammy Duckworth (D-Ill.), Joni Ernst (R-Iowa) and 12 of their colleagues Tuesday sent a letter to the U.S. Department of Agriculture (USDA) requesting additional funds be allocated to the biofuel industry through the
Commodity Credit Corporation (CCC) during the unprecedented economic circumstances brought on by the COVID-19 pandemic.
The letter is cosigned by Senators Tammy Baldwin (D-Wis.), Deb Fischer (R-Neb.), Amy Klobuchar (D-Minn.), Roy Blunt (R-Mo.), Dick Durbin (D-Ill.), Mike Rounds (R-S.D.), Tina Smith (D-Minn.), Josh Hawley (R-Mo.), Sherrod Brown (D-Ohio), Ben
Sasse (R-Neb.), Jerry Moran (R-Kan.) and John Thune (R-S.D).
"As the country follows the advice of local and state governments and remain at home, motor fuel use has rapidly decreased... The decrease in fuel consumption has left production facilities little choice but to idle production or close completely," the senators
wrote in a letter to USDA Secretary Sonny Perdue.
"Farm income and prices for corn and other crop commodities are directly linked to the health of the renewable fuel industry. Ethanol plants use 40 percent of all corn grown in the United States. Among other feedstocks, biodiesel and renewable diesel
producers currently use over 8 billion pounds of soybean oil a year, creating demand that adds 13 percent to the cash price of a bushel of soybeans. We have seen a significant drop in the price of corn and soybeans because of the decline in demand. Keeping
plants open is vital for our states and we ask that you use the authority given by Congress to assist the biofuel industry during extremely difficult times. We are supportive of the proposals the biofuel industry has put forward to reimburse feedstocks and also
believe that adding additional CCC funds to the Higher-Blends Infrastructure Incentive Program will drive future biofuel demand," the senators continued.
The historic Coronavirus Aid, Relief, and Economic Stabilization (CARES) Act provided an additional $14 billion to the CCC to help stabilize, support and protect farm income and prices while also maintaining balanced and adequate supplies of agricultural
commodities.
Also on Tuesday POET, Sioux Falls, S.D., announced it will idle production at its bioprocessing facilities in Chancellor, S.D., Ashton, Iowa, and Coon Rapids, Iowa, and delay the start-up of its new plant in Shelbyville, Ind., as producers across the United
States continue to grapple with the economic fallout of the ongoing COVID-19 pandemic. On an annualized basis, these operational changes are expected to reduce corn demand by 110 million bushels, freezing 330 million gallons of ethanol production across
the four facilities. POET has also significantly slowed production at other facilities, further decreasing corn demand.
POET is the world's largest biofuels producer. Started in 1987, the company today has a network of 28 production facilities across seven states. At full run rates, POET purchases 5% of U.S. corn and produces 2 billion gallons of ethanol, 10 billion pounds of
distillers dried grains, and 600 million pounds of corn oil annually. In 2019, Fast Company recognized POET on its annual list of "Most Innovative Companies" for transportation and FORTUNE recognized POET on its list of companies that are changing the world.
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