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)

Copyright (c) 2022 Dow Jones & Company, Inc.
Archer Daniels Midland (NYSE:ADM)
Graphique Historique de l'Action
De Juil 2022 à Août 2022 Plus de graphiques de la Bourse Archer Daniels Midland
Archer Daniels Midland (NYSE:ADM)
Graphique Historique de l'Action
De Août 2021 à Août 2022 Plus de graphiques de la Bourse Archer Daniels Midland