In the span of two months, COVID-19 has ravaged the biofuel industry, inflicting more pain than 30 years of attacks by competing fuel sources. At a time when farmers could least afford it, COVID-19 has taken drivers off the road, decreasing demand and sparking an onslaught of furloughs, cuts, and closures. It’s a daunting situation for an industry that was built by farmers, for farmers.
Agricultural communities were already facing an uphill battle at the start of 2020, working to rebuild momentum lost to trade barriers, severe weather, and regulatory uncertainty. But the added challenge of COVID-19 is unlike anything we’ve seen before. Over the course of this pandemic, half the biofuels industry was forced offline, sending shockwaves through the entire agricultural supply chain. For most farmers and producers, there’s no rainy-day fund for a crisis like this. They need immediate support.
Throughout the course of the pandemic, policymakers and the administration have made moves to assist struggling oil refiners resulting from the collapse in the fuel market. Yet, the U.S. Department of Agriculture (USDA) left biofuels out of the last round of relief efforts, despite bipartisan appeals from the House, Senate, and governors across the farm belt. And while we remain optimistic of biofuels’ long-awaited inclusion the next round of federal relief, negotiations are still underway, making the outcome unclear. Continued failure to act could mean fewer rural jobs will be left to save – a devastating blow to farmers and rural workers across the Midwest.
Biofuel producers sit at the heart of the rural economy. They provide a lower-cost, earth-friendly, high-octane option for motorists. At the same time, livestock operators rely on ethanol co-products to feed their cattle, and meatpackers depend on ethanol plants to provide the carbon dioxide (CO2) necessary to refrigerate and package the nation’s meat. Ethanol plants also provide CO2 to municipal water treatment facilities to safeguard our drinking water.
When producers are offline, everyone hurts, up and down the agricultural supply chain. That includes the 2.8 million men and women of America’s equipment manufacturing industry, who build the equipment needed to build, power, and feed our nation. They make up 12 percent of all manufacturing jobs and have been deemed essential in the fight to recover from the pandemic
In fact, a strong farm economy is vital to more than 700,000 agricultural equipment manufacturing jobs across the United States. While they continue to go to work to supply the equipment America’s farmers need to help feed our families, a recent survey by the Association of Equipment Manufacturers (AEM) found seven out of 10 equipment manufacturers have experienced negative impacts on their supply chain, and 91 percent cite decreased demand due to COVID-19 as the primary threat.
As we work to protect America’s manufacturing base, it’s critical that USDA step up and do its part to ensure that demand for equipment remains strong. That’s why AEM and Growth Energy are working together to put biofuels back on the market and strengthen the agricultural economy.
Leaders across the country agree, as indicated by the 70 mayors across the Midwest who just issued a warning to Washington, D.C. regulators: “Some of us have already seen our local ethanol plant shutter its doors while others have witnessed their local ethanol plant reduce operations. This is having devastating ripple effects throughout our economy.”
When the agricultural economy thrives, we all thrive. But the USDA must act, providing immediate, temporary, and direct assistance to protect a skilled workforce that rural America cannot afford to lose.
As the COVID-19 pandemic continues to send shockwaves throughout the rural economy, America is counting on the farm belt to ensure an uninterrupted harvest of essential food, fiber, and fuel. And the biofuel industry is a critical link in that supply chain. Keeping these plants online will be vital to preventing shortages, price spikes, and long-term damage to manufacturing centers that provide good-paying jobs across the heartland. The prosperity of rural America depends on it.
Emily Skor, CEO of Growth Energy, the nation’s largest association representing producers and supporters of ethanol, working to bring consumers better choices at the fuel pump, grow America's economy and improve the environment for future generations.
Dennis Slater is president of the Association of Equipment Manufacturers (AEM), the North American-based international trade group representing off-road equipment manufacturers and suppliers, with more than 1,000 companies and more than 200 product lines in the agriculture and construction-related industry sectors worldwide. The equipment manufacturing industry in the United States supports 2.8 million jobs and contributes roughly $288 billion to the economy every year.