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Peterson Leads Biofuels Caucus Letter to USDA Secretary

 

April 13, 2020



Washington, D.C - Representative Collin Peterson, Chairman of the House Agriculture Committee, led fellow members of the Biofuels Caucus in urging Agriculture Secretary Sonny Perdue to direct funding from the Coronavirus Aid, Relief, and Economic Security (CARES) Act to support the biofuels industry. Biofuels plants across the nation have idled production as stay at home orders reduce demand for fuel and the profitability of biofuels production.

“Biofuels production is an important piece of the agriculture economy and I urge the Secretary to use the resources Congress appropriated to support this sector through the financial stress caused by COVID-19,” said Peterson. “The biofuels industry entered this crisis behind the curve following the last few years of disastrous management of the RFS program by the EPA. The biofuels industry is going to need significant support to weather this disaster.”

Dozens of biofuels plants across the country have idled some or all of their production since March 1st. Of the roughly 200 ethanol plants in the U.S., roughly 30 have shut down, and another 80 have reduced production by 50% or more. Biofuels plants consume millions of bushels of grain each year. They also produce low-cost livestock feed products (dried distillers grains) and are a major producer of CO2 gas used by hospitals and food processors.

Chairman Peterson is co-chair of the Congressional Biofuels Caucus, a bipartisan group of Members of Congress who advocate for homegrown renewable fuel policies that boost farmer incomes and reduce dependence on foreign oil. He is also the sponsor of the Renewable Fuel Standard Integrity Act of 2019, a bill which provides certainty to the biofuels industry by setting an annual deadline for small refinery exemption applications and bringing transparency to the process.

The letter is 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.

Sincerely,

 

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