Advanced BioFuels USA

by Chuck Abbott (Successful Farming) … Trump administration could spend $50 billion — quadruple the cost of the auto industry bailout — in less than three years to buffer the impact of trade war and pandemic on agriculture. Farm groups welcomed the second round of coronavirus assistance while critics said it was “old-fashioned vote-buying” ahead of the Nov. 3 presidential election.

Hundreds of commodities, from cotton and wheat to goat milk, hemp, and tobacco, are eligible for payments. For most row crops, the minimum payment is $15 an acre.

“We just couldn’t totally estimate what those [losses during spring and summer] would be, so we waited until later this summer to understand better what the damage is from COVID,” said Agriculture Secretary Sonny Perdue during a Red River Farm Network interview.

The payment limit of $250,000 per farmer or entity is on top of a similar limit in the original CFAP, so the coronavirus maximum would be $500,000 per farmer or entity. Corporations, partnerships, and limited liability companies qualify for payments of up to $750,000 or a combined $1.5 million from the two versions of CFAP.

President Trump announced the assistance during a re-election rally in rural Wisconsin last Thursday night.

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In 2018 and 2019, the administration paid farmers and ranchers $23 billion to mitigate the impact of the Sino-U.S. trade war, which took hold in mid-2018.

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He (Perdue) declined to say whether coronavirus aid would go to ethanol producers.

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Scott Faber of the Environmental Working Group said CFAP2 amounted to “old-fashioned vote-buying … No amount of money will make up for the markets he [Trump] has lost.” 

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“I still want to see help for the ethanol industry that has been hurt by the drop in fuel demand, textile mills that are helping create COVID medical supplies, pork and poultry producers that had to depopulate as a result of plant closures, and contract growers who have faced loss of income,” said House Agriculture chairman Collin Peterson.

The USDA website for CFAP2 is available here.  READ MORE

RFA: New University Study on COVID-19 Impacts Underscores Need for Emergency Aid (Renewable Fuels Association)

Study shows ethanol producers took $8 billion hit because of COVID-19 (RFD TV)

STUDY HIGHLIGHTS IMPACT OF COVID-19 ON ETHANOL (Brownfiels Ag News)

Study Pegs Ethanol Industry COVID Impact at $8 Million (Energy.AgWired.com)

Excerpt from Renewable Fuels Association: As Congress and the administration continue negotiations on another potential COVID-19 relief package, a new study by university economists finds that ethanol producers will experience roughly $8 billion in losses this year due to the pandemic’s impact on world fuel markets. The study, conducted by economists from the University of Florida and Arizona State University, was published recently in the Journal of Agricultural & Food Industrial Organization.

“The COVID-19 pandemic in 2020 had a major negative impact on U.S. ethanol, gasoline, and oil prices and production,” the authors found. “COVID-19 has had a major impact on ethanol production. The producer loss due to COVID-19 is $7 billion.”

The estimated economic loss grows to a range of $7.9 to $8.6 billion when unemployment effects are included. The authors acknowledge that those estimates likely “understate the cost of COVID-19” to the ethanol industry because the impact of the pandemic on co-product output, demand and prices is not included.

Renewable Fuels Association President and CEO Geoff Cooper said the new study corroborates the findings of an RFA analysis published in July, which found pandemic-related losses could be $7 billion or more in 2020. According to RFA, the study also underscores the importance of ensuring ethanol producers are not again left out of any stimulus package that may move forward in the weeks ahead.

“This new, independent study confirms what has already been made painfully clear to the 350,000 men and women whose jobs are supported by the ethanol industry,” Cooper said. “The COVID-19 pandemic caused fuel demand to plummet and forced scores of ethanol plants to shut down, resulting in steep economic losses for the industry. While market conditions have improved since the spring, the ethanol industry is still struggling to fully recover from the pandemic, and ethanol producers across the country remain under financial stress.”

Cooper urged lawmakers and the administration to ensure emergency relief for ethanol producers is included in any forthcoming coronavirus aid deal.

“There is strong bipartisan support for providing assistance to renewable fuel producers in both the House and Senate,” Cooper said. “The HEROES Act passed by the House in May included emergency relief provisions for ethanol producers, and a similar measure was introduced in the Senate by Sens. Grassley and Klobuchar. We remain hopeful that a fourth COVID-19 aid package, with emergency relief for ethanol producers, will finally be pushed over the goal line in the weeks ahead.”  READ MORE