Chuck Grassley

United States Senator from Iowa

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Grassley, Duckworth, Ernst Call on USDA to Allocate Additional Funds to Biofuel Industry Negatively Impacted by COVID-19

Apr 07, 2020
WASHINGTON – Sens. Chuck Grassley (R-Iowa), Tammy Duckworth (D-Ill.), Joni Ernst (R-Iowa) and 12 of their Senate colleagues today 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.
 
“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.
 
In addition to Grassley, Duckworth and Ernst, the letter is cosigned by Sens. 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).
 
Full text of the letter follows or can be found HERE.
 
 
The Honorable Sonny Perdue
Secretary
1400 Independence Avenue SW
Washington, DC 20250
 
Dear Secretary Perdue,
 
We are concerned about our nation’s biofuel sector during the unprecedented economic circumstances brought on by the national pandemic of COVID-19.
 
As the country follows the advice of local and state governments and remain at home, motor fuel use has rapidly decreased. This dynamic comes on top of EPA’s failure to implement the RFS in accordance with the law, including the issuance of illegal small refinery waivers and the recent failure to enforce ethanol blending requirements. As the consumption of motor fuel continues to decrease in response to COVID-19, it is important to note that most U.S. gasoline contains at least 10 percent ethanol.
 
We are concerned for the many farmers and producers who will bear the impact of this decrease in consumption, further damaging an already hurting rural economy and resulting in the closing of production facilities that employ many people in rural communities in our home states.
As the U.S. Department of Agriculture (USDA) considers the allocation of additional funds provided to the Commodity Credit Corporation (CCC) by the Coronavirus Aid, Relief, and Economic Stabilization (CARES) Act we ask that you use the authority provided to assist the biofuel industry.
 
The decrease in fuel consumption has left production facilities little choice but to idle production or close completely. Since March 1, industry sources show more than four billion gallons of ethanol production has ceased production. The CCC was created to stabilize, support, and protect farm income and prices while also maintaining balanced and adequate supplies of agricultural commodities and aids in their orderly distribution.
 
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.
 
Thank you for considering our request and for your dedication to rural America. We look forward to working with you on deploying the additional resources that Congress gave you in the CARES Act.
Sincerely,
 
 
 
Chuck Grassley                                                                                   Tammy Duckworth
United States Senator                                                                         United States Senator
 
 
Joni K. Ernst                                                                                       Tammy Baldwin
United States Senator                                                                         United States Senator
 
 
Deb Fischer                                                                                         Amy Klobuchar
United States Senator                                                                         United States Senator
 
 
Roy Blunt                                                                                           Richard J. Durbin
United States Senator                                                                         United States Senator
 
 
M. Michael Rounds                                                                            Tina Smith
United States Senator                                                                         United States Senator
 
 
Josh Hawley                                                                                       Sherrod Brown
United States Senator                                                                         United States Senator
 
 
Ben Sasse
United States Senator
 
 
Jerry Moran
United States Senator
 
 
John Thune
United States Senator
 
 
 
 
 
 
 
 
*The Senators listed above support the contents of this letter. Due to COVID-19, physical signatures for this letter were not collected.
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