Iowa will direct $100 million of CARES Act money to several agricultural sectors.
Gov. Kim Reynolds announced Tuesday the money will go to some new programs and will expand some existing ones.
She has earmarked $15.5 million for grants to the state’s biofuel producers and $7 million to renewable fuel retailers. Biofuels were hit hard by the early stage of the pandemic that saw a huge reduction in demand for gasoline. Renewable fuels did not receive any relief funds directly through the CARES Act.
Monte Shaw, executive director of the Iowa Renewable Fuels Association, says he thinks Iowa is the first state to use federal funds to support the sector, though industry groups and Iowa’s two U.S. senators have been pushing for inclusion in the next federal relief package.
Shaw says he is grateful for the governor’s action because as much as half of Iowa’s ethanol production capacity was idled during the worst phase of the pandemic.
“This isn’t going to solve all of our problems, but this definitely buys Iowa producers some time,” he says. Maybe enough to see the next round of federal funding through to the finish line. “But also time for the economy to continue to rebound and fuel use to continue to return to more normal levels.”
Shaw says the industry entered 2020 with bruises from trade war disruptions and an ongoing dispute with the Environmental Protection Agency over its granting of renewable fuel waivers to some small refineries, which a court determined early this year were inappropriate.
He says statewide production has resumed to about 85 to 90 percent of capacity and it’s too soon to say whether any plants will be permanently shuttered.
“I would not be surprised if you didn’t see some plants change hands,” he says, “where just financially a group cannot make a go of it and have to sell out.”
In addition to support for biofuels, the governor’s announcement designates nearly $70 million to two livestock programs, $6 million to beginning farmers, $2 million to meat processors and $500,000 to fruit and vegetable growers and to schools who buy their produce.
