Biofuels not on a level playing field – Ethanol and biofuel reactions to USDA’s $19B coronavirus farmer relief package

What will the CFAP do?

First, let’s start with what we know from the USDA:

“CFAP will use the funding and authorities provided in the Coronavirus Aid, Relief, and Economic Security Act (CARES), the Families First Coronavirus Response Act (FFCRA), and other USDA existing authorities. The program includes two major elements to achieve these goals.

1. Direct Support to Farmers and Ranchers: The program will provide $16 billion in direct support based on actual losses for agricultural producers where prices and market supply chains have been impacted and will assist producers with additional adjustment and marketing costs resulting from lost demand and short-term oversupply for the 2020 marketing year caused by COVID-19.
2. USDA Purchase and Distribution: USDA will partner with regional and local distributors, whose workforce has been significantly impacted by the closure of many restaurants, hotels, and other food service entities, to purchase $3 billion in fresh produce, dairy, and meat. We will begin with the procurement of an estimated $100 million per month in fresh fruits and vegetables, $100 million per month in a variety of dairy products, and $100 million per month in meat products. The distributors and wholesalers will then provide a pre-approved box of fresh produce, dairy, and meat products to food banks, community and faith based organizations, and other non-profits serving Americans in need.

On top of these targeted programs USDA will utilize other available funding sources to purchase and distribute food to those in need.

• USDA has up to an additional $873.3 million available in Section 32 funding to purchase a variety of agricultural products for distribution to food banks. The use of these funds will be determined by industry requests, USDA agricultural market analysis, and food bank needs.
• The FFCRA and CARES Act provided an at least $850 million for food bank administrative costs and USDA food purchases, of which a minimum of $600 million will be designated for food purchases. The use of these funds will be determined by food bank need and product availability.

So who’s eligible? What are the rates? How will it be implemented? Well, we aren’t sure yet. As noted in the USDA announcement, “Further details regarding eligibility, rates, and other implementation will be released at a later date.” But the USDA press release notes several other programs they’ve recently implanted for rural America and farmers in particular, such as farm loan flexibilities, deferrals, maturity extensions, several grant programs available, etc. Check it out here.

Continue reading on the next page for the reactions from ethanol and biofuel leaders like RFA, Growth Energy, and others, what about rural America and biofuels and what needs to be done, what about the SBA loans and PPP, and more.