ADVERTISEMENT

ADVERTISEMENT

USDA investing $700 million to support biofuel producers and sustainable fuel markets hit by pandemic

Many of the more than 100 biofuel companies and 195 facilities that will receive economic relief operate out of Minnesota.

Randy Doyal.jpg
Randy Doyal, then-CEO of Al-Corn Clean Fuel, stands in front of the cooperative's plant in Claremont in 2018, as the plant was nearing completion of its $146 million expansion and modernization project.
Noah Fish / Agweek
We are part of The Trust Project.

CLAREMONT, Minn. — Biofuel producers across the country will receive economic relief to support sustainable fuel markets impacted by the COVID-19 pandemic.

The U.S. Department of Agriculture announced that it will distribute $700 million to help lower costs and support biofuel producers who faced market losses from the COVID-19 pandemic. More than 100 biofuel companies and 195 facilities will receive economic relief, meant to protect workers and support biofuel capacity.

The funds are made available through the Biofuel Producer Program, created as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The investments include more than $486 million for 62 producers located in socially vulnerable communities, according to the press release.

In a statement from USDA, Agriculture Secretary Tom Vilsack said the funding shows a commitment to "rebuilding the rural economy" after it was upended by the pandemic.

“That’s why USDA is targeting resources and investments to improve the strength and resiliency of America’s sustainable fuel markets," said Vilsack on June 3. "The investments we’re announcing today will pave the way to economic recovery for America’s biofuel producers, stimulate a critical market for U.S. farmers and ranchers, and support our nation’s transition to a clean-energy economy.”

ADVERTISEMENT

Biofuel producers experienced market losses on a combined 3.7 billion gallons as a result of the pandemic, according to USDA data. Producers in 25 states will receive financial assistance, including Iowa, Minnesota, North Dakota, South Dakota and Wisconsin.

Iowa-based Southwest Renewable Energy LLC, which suffered a market loss on 14.3 million gallons of ethanol due to the pandemic, will receive $3 million through the program.

Al-Corn Clean Fuel

Minnesota-based Al-Corn Clean Fuel LLC is receiving $8.387 million in assistance for its facility located in Claremont, Minnesota. Al-Corn began as a farmer-owned ethanol production cooperative in 1994 as a way for local farmers to add value to their corn crop.

Thomas Harwood is the new CEO of Al-Corn Clean Fuel, replacing longtime CEO Randy Doyal — an original board member of the cooperative — who retired earlier this month.

"What you saw was just demand destruction, like the industry has never seen before," said Hardwood of impact of the pandemic.

He said the plant, which also produces dried distillers grains and corn oil, produces around 130 million gallons of ethanol annually. The Al-Corn plant also responded to the emerging need for hand sanitizer during the height of the pandemic.

"We were able to make a product that was at a higher quality standard than what was available at that time," he said of the sanitizer. "That's one of the key opportunities that our plant had, was that we were able to stay operating at a significantly reduced rate due to the pandemic."

Hardwood said on top of the market losses, staffing has been a challenge in recent years. Currently, there are over 50 employees working at the ethanol plant in Claremont.

ADVERTISEMENT

"It's been it's been very difficult to find folks and retain folks," he said.

He said economic relief for the industry could go a long way but a lot of damage has already been done.

"There were dozens of plants just regionally that closed," he said. "That cascades back to the local corn economy, and certainly you see that in terms of the corn price, and bushels that went unground as a result of the pandemic slow down."

Noah Fish is a multimedia journalist who creates print, online and TV content for Agweek. He's also the host of the Agweek Podcast.

While covering agriculture he's earned awards for his localized reporting on the 2018 trade war, and breaking news coverage of a fifth-generation dairy farm that was forced to sell its herd when a barn roof collapsed in the winter of 2019. His reporting focuses on the intersection of agriculture, food and culture.

He reports out of Rochester, Minnesota, and can be reached at nfish@agweek.com
What to read next
The Red River Valley Water Supply Project will sue farmland owners for eminent domain if they don’t sign easements before July 8, 2022. Farmers say the project is paying one-tenth what others pay for far smaller oil, gas and water pipelines.
The company is counting on consumers warming to eating wheat that has been genetically modified (GMO), as food prices soar due to the Ukraine war and more extreme weather patterns increase the risk of global famines.
Aid that helped schools feed millions of U.S. children over the last two years will be extended, pending congressional approval, after senators reached a deal following fears of its expiration at the end of the month.
The announcement comes as fair season begins. Highly pathogenic avian influenza has affected almost 3 million birds on Minnesota farms in 2022.