USDA Says Ethanol COVID Payments Coming Soon

Cindy Zimmerman

Two years ago ethanol producers were in the middle of the worst downturn in the industry’s history as the new COVID-19 pandemic put the country at a standstill and production dropped by 50 percent in a month. Under the CARES Act, $700 million was approved to help make up for those losses to producers, but that money has yet to be distributed.

USDA Undersecretary for Rural Development Xochitl Torres Small told a House Agriculture Committee hearing this week that those payments will be coming soon. “We’ve been working to get the money out the door, we took some time to get it right,” Small said. “We are expecting payments to go out in late spring or early summer.”

Small explained that the agency had to “pivot” in its determination of payments based on feedback they received. Karama Neal, administrator of USDA’s Rural Business-Cooperative Service, said they needed to take into account that ethanol producers also sell animal feed in the form of distillers dried grains (DDGS) or CO2 as a co-product. “They had contracts to do that and wanted to meet those obligations so they were operating, but they were operating at a loss,” said Neal. That amendment was published in January and applications closed in February.

Listen to Reps. Randy Feenstra (R-IA) and Rodney Davis (R-IL) question Small.
House Ag hearing rural development (9:59)

Audio, biofuels, Ethanol, Ethanol News, USDA