WASHINGTON — Describing it as a “missed opportunity,” Geoff Cooper, the president and CEO of the Renewable Fuels Association expressed disappointment that the U.S. ethanol industry wasn’t included in the round of financial assistance to the U.S. agriculture industry impacted by the coronavirus pandemic.
Reactions to the announcement of the $19 billion Coronavirus Food Assistance Program, which includes $16 billion in direct payments to farmers and ranchers and a $3 billion food purchase program, were mixed, with ag groups applauding the intent of the program, but making it clear that their members will need more to make up for financial losses.
“USDA missed a crucial opportunity to lend a helping hand to an industry that is suffering the worst economic crisis in its history. Roughly half of the ethanol industry is shut down today, as fuel demand has collapsed in response to COVID-19. Corn demand and prices have plummeted as plants across the country are idling. Jobs are being lost, grain markets are being ravaged, rural communities are being destabilized, and the long-term future of homegrown renewable fuels hangs in the balance,” Cooper said.
The failure to be included in the U.S. Department of Agriculture’s financial assistance program was the second hit for the U.S. ethanol industry in less than a week.
Five governors of oil industry-rich states, Louisiana, Oklahoma, Texas, Utah and Wyoming, sent letters to the U.S. Environmental Protection Agency requesting that the agency waive oil refineries’ obligation to comply with the Renewable Fuel Standard.
With Sonny Perdue, U.S. secretary of agriculture, indicating that there could be more financial assistance coming, Cooper urged that the ethanol industry be included in that.
“We implore Congress and the administration to ensure that the ethanol industry is included in the next round of emergency relief,” Cooper said.
The direct payments will help the nation’s hog farmers, but the plan, which includes payment limitations and lower amounts than expected, falls short of what the National Pork Producers Council wanted.
Earlier in the week, during a teleconference, NPPC officials called for direct payments with no eligibility restrictions.
“While the direct payments to hog farmers will offset some losses for some farmers, they are not sufficient to sustain the varied market participants, including those who own hogs as well as thousands of contract growers who care for pigs. Unlike other industries that have received COVID relief without restrictions, many of our hog farmers have been left behind,” said Howard “A.V.” Roth, president of the NPPC.
Pork industry economists estimate that U.S. pork producers could lose $5 billion collectively due to impacts from the coronavirus pandemic.
The U.S. cattle industry also expressed concern that the announced amounts fall short of actual needs.
“America’s cattle producers are facing unprecedented crisis after two market disruptions in less than a year, and this funding will provide the certainty needed to move forward with their work. While the relief funds that have been allocated to USDA by Congress represent a start to stabilizing the industry, there is much more work to be done to protect the cattle producers who are an essential component of the agriculture industry and the anchor for rural America,” said Marty Smith, president of the National Cattlemen’s Beef Association.
A study commissioned by NCBA released findings earlier in the week that showed cow-calf producers could lose $8.1 billion, the stocker/backgrounder sector could lose some $2.5 billion and feedlot operators could lose $3 billion as a result of the economic consequences of COVID-19.
The National Milk Producers Federation welcomed the USDA disaster assistance program.
“Dairy’s fortunes have been especially grim, given the perishability of our product, its daily harvest and the fact that the virtual shutdown of the food service market has wiped out more than one third of our product demand. After five years of poor prices, many producers faced financial difficulties even before the coronavirus crisis,” said Jim Mulhern, president and CEO of the NMPF.
Mulhern echoed the other group leaders in calling for more assistance for farmers hard hit by the sudden loss of markets for their products due to shutdowns from COVID-19.
“We hope to work with USDA and members of Congress on implementing the plan and on the further assistance that will inevitably be needed due to this deepening crisis,” Mulhern said.