Vilsack: Iowa ethanol industry is in ‘very, very serious shape’

Source: By Sioux City Journal • Posted: Thursday, April 30, 2020

CEDAR RAPIDS — Iowa Democrats criticized Republicans for failing to provide needed aid to the ethanol industry that has been buffeted by low commodity prices, trade disruptions and policies favoring Big Oil.

“This is an incredibly grave time for all of us, but it is a particularly vulnerable time for rural America,” former Iowa Lt. Gov. Patty Judge, co-founder of Focus on Rural America, said on a call with reporters Wednesday. “It poses very serious long-term consequences. Dealing with the consequences of this virus could, in fact, wipe many small towns across the country off the map.”

The rural economy was in trouble before the pandemic, Judge said. Farm income was down by half compared to 2013. Farm bankruptcies were escalating. In 2019, 44 percent of American farmers were struggling to cover their costs. Trade disruptions cost Iowa producers $2 billion in 2018.

A recent study by Iowa State University found that COVID-19 has had a bigger impact on biofuels than on any other part of the farm economy, costing the industry an estimated $2.5 billion with 30 plants in Iowa to close, Judge said.

Tom Vilsack, a former Iowa governor and USDA secretary, referred to the cascading impacts of the coronavirus pandemic on the biofuels industry at a time when it has been weakened by the EPA small refinery waivers.

“It is in very, very serious shape,” he said.

Vilsack questioned whether the Trump administration understands the benefits of the ethanol industry. It provides a stable market for crops, an affordable supply of feed supplements for livestock producers, it supports exports, provides jobs — as many as 400,000 Americans at one time, and gives consumers a less expensive fuel option that is cleaner burning than fossil fuels.

However, unlike oil and gas producers, the ethanol industry hasn’t been included in a coronavirus relief package.

“If the president is going to invite oil executives to the White House, I believe he should do the very same thing for the biofuel industry,” Judge said.

“And now, a number of conservative lawmakers on The Hill are suggesting now is the time for the administration to turn its back totally, completely on the Renewable Fuel Standard,” Vilsack added. “I think there’s a better way.”

He recommended the USDA use the Commodity Credit Corporation to provide help to the ethanol industry.

Another solution, said Iowa 1st District Democratic Rep. Abby Finkenauer, is her proposal to pump $600 million over six years into building out the infrastructure needed to expand markets for biofuels, such as corn-based ethanol. It would help help retailers offer higher ethanol blends and expand the footprint of the biofuels market.

She was disappointed that biofuels interests did not receive aid in a USDA package.

“Our biofuels industry desperately needed help and attention, especially when they’ve been getting hit so hard and so long by decisions of this administration, which has time and time again sided so much with Big Oil over our friends and neighbors here in Iowa,” Finkenauer said.

She expressed frustration that although there is a bipartisan coalition in Congress supporting biofuels, the Trump administration ignores their concerns.

“We can only take so much. This industry can only take so much,” Finkenauer said.

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