Grassley urging USDA to aid ethanol industry through CCC |

Grassley urging USDA to aid ethanol industry through CCC

The Hagstrom Report

Senate Finance Committee Chairman Chuck Grassley, R-Iowa, said last week that he will send a letter to Agriculture Secretary Sonny Perdue urging him to use the Commodity Credit Corporation to help the ethanol industry.

Grassley said he did not know exactly how the ethanol industry should be supported, and suggested that reporters ask the industry what form of assistance would be helpful. But he said the aid is justified because gasoline use and prices have plummeted amid the coronavirus pandemic and ethanol plants have had no choice but to idle production.

Renewable Fuels Association President and CEO Geoff Cooper told The Hagstrom Report in an email that the CCC could be used “to reimburse U.S. ethanol plants for a share of their feedstock purchases.”

“The Commodity Credit Corporation was expressly created to stabilize, support, and protect farm income and prices,” Cooper said. “CCC also helps maintain balanced and adequate supplies of agricultural commodities and aids in their orderly distribution.”

“As ethanol and its co-products are the largest market for corn, the health of the ethanol industry is directly linked to farm income and prices for corn and other crop commodities. In addition, ethanol itself is classified as an agricultural commodity,” Cooper said.

“For these reasons, an appropriate use of CCC resources would be to directly assist ethanol producers struggling to survive the COVID-19 market shock. CCC funds could be used to reimburse U.S. ethanol plants for a share of their feedstock purchases.”

Biofuels and other groups wrote Perdue that “it would be an appropriate use of CCC funds to offset a portion of biofuel producer feedstock purchases during the first quarter (Jan. 1, 2020, to March 31, 2020).”

Grassley also noted that the Energy Department is buying oil for the Strategic Petroleum Reserve and that there should be parity “for all liquid fuels.” But when asked whether the government should buy ethanol, he said he did not know if the government has enough storage capacity.

Grassley said the letter also would be signed by Sen. Joni Ernst, R-Iowa, Sen. Tammy Duckworth, D-Ill., and 11 or 12 other senators.

Asked about the closing of meat plants in Iowa because some workers have tested positive for the coronavirus, Grassley said he hoped everyone would be “humanitarians” at this time, and that he would leave such decisions to public health officials.

But he also noted there is a problem for pork producers when animals reach slaughter weight but cannot be sent off to processing plants to make room for newborn pigs. Grassley said he would talk to Perdue about the farmers’ problems under such circumstances, as well as other issues.

Grassley said he and his staff will investigate whether the Small Business Administration will make farmers eligible for the Economic Injury Disaster Loan (EIDL) program under the recently-passed CARES Act. The SBA initial rule for the program said farmers are not eligible, but Grassley said Congress intended for farmers to be covered.

Grassley said he believes U.S. Trade Representative Robert Lighthizer still wants the U.S.-Mexico-Canada Agreement on trade to go into effect on June 1 so he does not lose leverage with the Mexican and Canadian governments.

But Grassley said he and other Finance Committee members want it delayed because rules for the auto industry have not been written, and he noted that farm groups have not insisted on the June 1 date.

Grassley also said he and House Ways and Means Committee Chairman Richard Neal, D-Mass., have called on the International Trade Commission to identify the products that may be needed to respond to the COVID-19 pandemic. In a letter to ITC Chairman David Johanson, the lawmakers asked the commission to report by April 30.

“As we grapple with the challenges presented by the novel coronavirus, we are keenly aware that our challenges are being severely exacerbated by disruptions and deficiencies in our supply of equipment, inputs, and substances needed for treating and otherwise responding to the COVID-19 pandemic,” Grassley and Neal wrote.

“We ask that the commission provide a report to the committees and the USTR that identifies imported goods related to the response to COVID-19, including their source countries, tariff classifications, and applicable rates of duty so as to assist the committees and USTR in proposing or taking appropriate and responsive actions.” ❖

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