Washington Insider -- Wednesday

USDA Aid Announcements Keep Coming

Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.

Report Says Biofuel Plans Pushed Back

The already late announcement of 2021 biofuel (and 2022 biodiesel) levels under the Renewable Fuel Standard (RFS) and those for 2022 biofuels are not apparently going to come soon, according to a report from Reuters.

The news service reported that the White House has pushed back the proposed rule for the RFS levels out of "political concerns." Expectations had been that they would be announced this month and finalized by the statutory deadline of November 30. The 2021 levels were not even proposed in 2020 and the deadline for those was already missed.

In fact, the proposed levels for 2021 and 2022 have not even been sent to the Office of Management and Budget for their review.

While the report suggests political considerations are keeping the plan on hold, there have been several court decisions now that could also have affected the proposed levels. But no matter the case, it appears the proposed marks are not going to emerge yet this month.

More Soyoil Expected to Come on the World Market

A new law in Argentina expected to be signed by the country's president yet this month would set a minimum use of biodiesel of 5% and that could drop to 3% relative to diesel fuel sold to the public.

Currently, Argentine diesel fuel is 10% biodiesel. The law is aimed at sustainable use of biofuels in diesel and gasoline.

The current biodiesel level of 10% uses about 1 million tonnes of biodiesel annually, and industry officials indicate the reduction would mean more supplies would be available for export.

"Lowering the blend in Argentina means higher bean-oil exports," said Luis Zubizarreta, head of Argentina's Carbio biofuel industry chamber, according to Reuters.

Washington Insider: USDA Aid Announcements Keep Coming

USDA has announced still-more aid for agriculture or agriculture-related sectors, this time announcing that it will be sending out aid to the U.S. timber and logging industry that was hurt by the pandemic.

USDA Secretary Tom Vilsack announced that up to $200 million in aid would be made for U.S. timber harvesters and haulers that were negatively impacted by the pandemic via what is called the Pandemic Assistance for Timber Harvesters and Haulers (PATHH) program. The funding for the effort came via the 2021 Consolidated Appropriations Act that was approved in December 2020.

That measure was a COVID relief effort including payments to several components of U.S. agriculture. The timber harvesters and haulers would be eligible for the aid if they had a loss in gross revenue of at least 10% between from January 1-December 1, 2020, compared with the same period in 2019.

To be eligible, the business must have at least 50% of its gross revenue coming from cutting or transporting timber or processing wood onsite at the forest. Two payments are possible, with the first at 80% of the revenue decline with a second payment possible if there are still additional funds left over. And, there will be a per-person/entity payment limit of $125,000.

Vilsack commented that the two payment installments allow USDA to adjust if there is more demand or less demand for the money available. But Vilsack said the $200 million was picked by lawmakers as "place to start." It's not clear if there is more than $200 million requests for payment whether USDA would opt to put more money into the effort.

Given that the signup runs July 22-October 15, funds will not arrive until later this year.

That seems to be the trend with COVID aid efforts the past few months. Make a splashy announcement of dollars that are coming while the actual funds will not appear in the bank accounts of those requesting the help until later.

Vilsack said the department has announced aid totaling $13 billion. But he didn't say how many of those dollars have indeed been provided to producers.

USDA's effort announced last week to provide funds to hog and poultry producers who owned their livestock but were forced to depopulate them are hopefully going to see those dollars by the end of the year.

And there are still funds that haven't even been announced like the timber and livestock aid. Those efforts include contract pork raisers who still have heard no word from USDA even as the agency has said that aid to contract poultry growers is on the way or has been made.

And there is the $700 million in aid to biofuel producers that has been announced, but not in enough detail to give an idea when those funds will be coming.

And then there is aid for dairy farmers. USDA in June announced that $400 million would be offered up to dairy farmers via the Dairy Donation Program (DDP). But that aid isn't ready to go yet either -- the regulation for the effort is still under review at the Office of Management and Budget (OMB).

And there are supplemental payments to small and medium dairy farmers under the Dairy Margin Coverage (DMC) program that USDA said would total $568 million. Those, too, need some regulatory action on the part of USDA and nothing has been sent over to OMB as of yet.

Plus, recall the much-talked-about dairy aid that was expected to be announced when Vilsack was to visit Wisconsin in late-June. He didn't go and neither did the aid announcement. And no one is talking about the aid at this point.

So there seems to be a pattern of getting aid announced faster than getting the dollars in the hands of those affected by the pandemic. That is not totally uncommon, but it seems to be the norm rather than the exception at this point.

So we will see. The tally of money that is coming continues to rise, and the process of getting that from the announcement stage to the bank accounts of those affected is a process that needs to be watched closely, Washington Insider believes.

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