Iowa uses $100m from CARES Act funds to help ag

Iowa livestock producers to receive $60 million and biofuel producers $15.5 million.

Jacqui Fatka, Policy editor

August 25, 2020

5 Min Read
Trump Reynolds Perdue WH meeting 050620.png
Iowa Gov. Kim Reynolds met with President Donald Trump and Secretary of Agriculture Sonny Perdue at the White House on Wednesday, May 6, 2020.White House

Iowa Gov. Kim Reynolds announced the additional allocation of Iowa’s funds from the federal Coronavirus Aid, Relief & Economic Security (CARES) Act of $100 million, with much of that available to assist and support Iowa’s agricultural economy, including biofuel and livestock producers, and funds to help small meat processors expand.

“Iowa is at the foundation of our global food supply chain and the epicenter of the renewable fuels industry,” Reynolds said. “COVID-19 and a devastating derecho dealt a major blow to everything from the demand for ethanol to the supply of meat on grocery store shelves, but just as important are the livelihoods of thousands of Iowa farm families, agricultural industries and the communities they support. Today’s investment reflects the critical role Iowa’s ag industry has in our state's overall economic recovery.”

“This has been a tough year for the agriculture community. I'm grateful that Gov. Reynolds has been a strong advocate for the farmers and agribusinesses in our state,” Iowa agriculture secretary Mike Naig said. “The programs funded by the CARES Act will help our farmers, renewable fuels retailers and producers and small meat processors respond to market disruptions and continue on the road to recovery.”

Related:Trump discusses derecho ag damage in Iowa visit

The allocations are as follows:

* $60 million -- Iowa Livestock Producer Relief Fund. Using the Iowa Economic Development Authority’s (IEDA) existing small business relief program infrastructure, this program will provide grants of up to $10,000 to eligible producers of pork, beef, chicken, turkeys, dairy, fish or sheep to serve as working capital to stabilize livestock producers. (administered by IEDA).

* $15.5 million -- State Biofuel Grant Program. Biofuel producers were excluded from receiving aid under other parts of the CARES Act; this program will provide relief to those Iowa ethanol and biodiesel producers based on gallons produced. Grants will also be awarded through IEDA’s existing small business relief program and are capped at a maximum grant of $750,000 per producer. (administered by IEDA).

* $7 million -- Renewable Fuel Retail Recovery Program. Announced previously, this funding supports a program that helps expand retail fueling infrastructure for higher-blend renewable fuels, including E15 or higher and B11 or higher (administered by Iowa Department of Agriculture & Land Stewardship [IDALS]).

* $6 million -- Iowa Beginning Farmer Debt Relief Fund. The COVID-19 pandemic has negatively and disproportionately affected a large number of beginning farmers in Iowa, creating the potential for longer-term generational damage to Iowa agriculture. This program will provide eligible beginning farmers with a long-term debt service payment of up to $10,000, to be paid directly to their lender (administered by IEDA).

Related:Iowa launches disposal assistance program for pork producers

* $2 million -- Meat Processing Development & Expansion Program. Designed to aid small meat processors, this program is focused on expanding processing capacity across the state to meet protein demand (administered by IDALS).

* $500,000 -- Farm Produce & Protein Program. This innovative program is designed to help specialty agricultural producers in Iowa as well as the schools that purchase their products. In addition to supporting local growers of fruits and vegetables to expand their capacity, it provides grants to schools that buy produce and other local crops and protein sources (administered by IDALS).

* Up to $9 million -- Iowa Disposal Assistance Program. The disruption to the meat supply chain from COVID-19 forced producers to euthanize and dispose of livestock due to lack of market access. This program, announced initially in May, provided direct payments to producers to recoup those expenses (administered by IDALS).

Iowa Corn Growers Assn. president and farmer Jim Greif said the organization is thankful and commends Gov. Reynolds for finding new avenues to support the state’s farmers and biofuel producers; every bit of help is needed. Greif added, “2020 has been a trying year, with the lowest corn prices in over a decade, trade disputes, attacks on the Renewable Fuel Standard and pending small refinery waivers -- all while navigating a global pandemic. This additional funding is welcome news this week.”

The Iowa Renewable Fuels Assn. (IRFA) welcomed the $15 million of relief funding for Iowa renewable fuel producers, making Iowa the first state in the nation to provide direct aid to the biofuel sector.

“Gov. Reynolds has provided a much-needed lifeline for Iowa’s renewable fuels producers,” IRFA executive director Monte Shaw said. “At its peak, the COVID-19 pandemic led to the idling of roughly 50% of Iowa’s biofuels production capacity. Even today, fuel use has not returned to normal, and biofuels producers are struggling to simply break even. IRFA members from across the state are deeply grateful for Gov. Reynold’s leadership as they work to recover from the financial blow wrought by the pandemic.”

The relief funding will be awarded based on the number of qualifying gallons produced in the first quarter of 2020. IRFA continues to work with members of Congress on possible federal relief. “Today’s action by Gov. Reynolds will help Iowa’s biofuels producers keep going until Congress and the Trump Administration act,” Shaw added.

Naig unveiled the details of the $7 million Iowa Renewable Fuels Recovery Program that Reynolds first announced on June 30. The new program, which utilizes the state’s CARES Act funding, provides grants to Iowa fuel retailers that add E15, B11 and higher biofuel blends to their stations. These new grants are separate from Iowa’s existing biofuel infrastructure program, the Renewable Fuels Infrastructure Program, funds from which cannot be used on the same equipment or costs.

The program will provide up to $30,000 per approved project, and applicants may submit both ethanol and biodiesel-related applications for a single site, for maximum funding of $60,000 per site. Funds will be awarded to projects completed by Dec. 30, 2020, or for purchasing equipment delivered by Dec. 30, 2020, and installed at a later date. The retailer must commit to selling the qualifying biofuel blend for a minimum of 60 months. To provide flexibility, the 60-month commitment may begin anytime within 24 months of project completion. Initially, 40% of the funds are being reserved specifically for Iowa’s smaller fuel retailers -- those with 10 fuel stations or fewer.

To apply for a grant or learn more about the new program, visit https://iowaagriculture.gov/grants.

About the Author

Jacqui Fatka

Policy editor, Farm Futures

Jacqui Fatka grew up on a diversified livestock and grain farm in southwest Iowa and graduated from Iowa State University with a bachelor’s degree in journalism and mass communications, with a minor in agriculture education, in 2003. She’s been writing for agricultural audiences ever since. In college, she interned with Wallaces Farmer and cultivated her love of ag policy during an internship with the Iowa Pork Producers Association, working in Sen. Chuck Grassley’s Capitol Hill press office. In 2003, she started full time for Farm Progress companies’ state and regional publications as the e-content editor, and became Farm Futures’ policy editor in 2004. A few years later, she began covering grain and biofuels markets for the weekly newspaper Feedstuffs. As the current policy editor for Farm Progress, she covers the ongoing developments in ag policy, trade, regulations and court rulings. Fatka also serves as the interim executive secretary-treasurer for the North American Agricultural Journalists. She lives on a small acreage in central Ohio with her husband and three children.

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