Archer Daniels Midland, Poet and Others Receive U.S. Aid for Biofuel Production
04 June 2022 - 4:14AM
Dow Jones News
By Kirk Maltais
Archer Daniels Midland Co. and Poet LLC stand to benefit from a
new $700 million aid program to mitigate the financial effects of
the Covid-19 pandemic on biofuel producers.
ADM and Poet are each receiving $50 million to cover losses at a
combined 45 facilities, according to USDA data obtained by The Wall
Street Journal. Poet accounts for 38 of the facilities, located in
nine states.
The program, announced Friday, will aid 195 biofuel facilities
that were forced to cut production or close down entirely during
the early days of the pandemic. The program doubles what the U.S.
Department of Agriculture gave to the biofuel industry last year as
part of a $2.6 billion aid package, also aimed at helping farmers
recover from the pandemic.
The USDA estimates producers of biofuels, which use crops such
as corn and soybeans as feedstocks, sustained unexpected losses of
$3.7 billion from the pandemic.
"As businesses reopen and fuel demand returns, USDA's Covid-19
support will help ensure a strong and swift recovery across the
rural economy," a representative for Poet said in an emailed
statement.
ADM didn't immediately comment on the news.
Biofuel production, particularly ethanol, fell amid government
efforts to control the pandemic, sliding to a record low of 537,000
barrels a day in late April 2020, according to data from the U.S.
Energy Information Administration. Production returned to
pre-pandemic levels by June 2021, with the EIA reporting Thursday
that U.S. daily output is at 1.071 million barrels a day.
Friday's announcement by the USDA comes as the industry awaits
the decision from the U.S. Environmental Protection Agency
regarding ethanol blending mandates. Earlier this week, reports
surfaced that the Biden administration will likely increase the
amount of ethanol mixed into U.S. fuel amid a surge in gasoline
prices this year.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
June 03, 2022 13:59 ET (17:59 GMT)
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