Tags: Coronavirus | Financial Markets | biofuels | bailout | demand | collapsing

Biofuels Industry Seeks Bailout to Weather 'Collapsing Demand'

Biofuels Industry Seeks Bailout to Weather 'Collapsing Demand'
(Dreamstime.com)
 

Friday, 03 April 2020 12:47 PM

The U.S. biofuel industry has asked the Trump administration for funds from the U.S. Department of Agriculture's Commodity Credit Corporation to help it survive a demand slump triggered by the coronavirus outbreak, according to a letter seen by Reuters.

The funds could be used to offset a portion of the industry's corn and soy bean purchases, or as direct assistance to companies to help them retain staff, according to the April 1 letter addressed to Agriculture Secretary Sonny Perdue.

The letter, signed by representatives of the nation's top biofuel trade groups including the Renewable Fuels Association, said that "collapsing demand" for fuel during the outbreak had idled some 3.5 billion gallons of annualized ethanol output at a quarter of the nation's production facilities.

"The biofuels industry has been hit especially hard by the sharp decline in fuel demand across the country, as residents follow local, state, and federal guidance to practice social distancing and minimize travel," it said.

"With these realities in mind, we ask that USDA use its CCC authority to directly assist biofuel producers," it said.

The biofuels groups pointed out that the U.S. ethanol industry accounts for about 40% of U.S. corn demand, making it an important market for farmers.

An official at the U.S. Department of Agriculture did not immediately respond to a request for comment.

The biofuel industry is part of a long list of businesses seeking help to counter the impact of the global pandemic, which has infected more a million people worldwide, decimated travel, and forced massive disruptions in daily life around the world. 

© 2020 Thomson/Reuters. All rights reserved.


   
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The U.S. biofuel industry has asked the Trump administration for funds from the U.S. Department of Agriculture's Commodity Credit Corporation to help it survive a demand slump triggered by the coronavirus outbreak, according to a letter seen by Reuters.
biofuels, bailout, demand, collapsing
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2020-47-03
Friday, 03 April 2020 12:47 PM
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