USDA to provide $700 million in COVID-19 relief for biofuels

By Erin Voegele | June 15, 2021

The USDA announced on June 15 it will provide $700 million in COVID-19 relief to biofuel producers as part of the Pandemic Assistance for Producers initiative. The agency said the programming is planned for implementation within 60 days and will focus on filling gaps in previous rounds of assistance and helping beginning, socially disadvantaged and small and medium sized producers that need support.

“USDA is honoring its commitment to get financial assistance to producers and critical agricultural businesses, especially those left out or underserved by previous COVID aid,” said Agriculture Secretary Tom Vilsack. “These investments through USDA Pandemic Assistance will help our food, agriculture and forestry sectors get back on track and plan for the future. Since January, USDA has provided more than $11 billion of assistance directly to producers and food and agriculture business.”

The USDA first announced in intent to launch the Pandemic Assistance for Producers initiative on March 24, 2021, as part of the agency’s effort to distribute COVID-19 relief resources more equitably. The biofuels industry was one of several ag sectors that was not granted assistance as part of earlier pandemic relief programs. In its March announcement, the USDA said at least $6 billion in relief would be allocated to new COVID-19 relief programs.

In its latest announcement, the USDA indicated $700 million of those funds will go to biofuels producers. The agency also announced it will allocate funds to other previously underserved ag sectors, including $200 million in aid to small, family-owned timber harvesting and hauling businesses; $700 million in pandemic response and safety grants for PPE and other protective measures to help specialty crop growers, meat packers and processors, seafood industry workers and others, and up to $20 million in additional organic cost share assistance, including for producers who are transitioning to organic. The agency also announced additional support for dairy farmers and processors, including $400 million for the new Dairy Donation Program to address food insecurity and mitigate food waste and loss; additional pandemic payments targeted to dairy farmers that have demonstrated losses that have not been covered by previous pandemic assistance, and approximately $580 million in supplemental dairy margin coverage for small and medium farms. In addition, the agency said it will offer assistance for poultry and livestock producers left out of previous rounds of pandemic assistance, including contract growers of poultry, and livestock and poultry producers forced to euthanize animals during the pandemic.

The American Coalition for Ethanol expressed appreciation for USDA’s announcement but stressed that more funding is needed. “While we sought a higher level of funding to offset the damage done to ethanol producers from the unprecedented global pandemic, we appreciate that USDA is going to make some funds available yet this summer,” said Brian Jennings, CEO of ACE. “The fact that the aid won’t address the full impacts and need reinforces our belief that USDA should not allow a disproportionate amount of funds to go to large conglomerates at the expense of farmer-owned and smaller ethanol producers. We have engaged USDA on ways to ensure equitable treatment for farmer-owned and small ethanol producers and look forward to the specifics on how USDA intends to distribute funds.”

The Renewable Fuels Association also applauded the USDA’s announcement, and said the organization looks forward to learning program details. “We are pleased to see $700 million in emergency relief for biofuel producers included in today’s USDA announcement, and we are happy to hear USDA intends to administer the aid in the next 60 days,” said Geoff Cooper, president and CEO of the RFA. “This assistance comes at a critical time, as ethanol producers are still struggling to recover from COVID-related market losses and are now facing historically high feedstock costs. Many plants remain offline or are operating at reduced output rates. We look forward to receiving additional details on the program from USDA and we are eager to work with the department to ensure smooth and successful implementation.”