MN Ethanol Industry Added $5B+ to Economy in ’11

Minnesota ranks fifth among all states in terms of ethanol production capacity—and every dollar invested in building ethanol plants within the state between 1990 and 2011 generated $8.13 for the state’s economy.

Minnesota’s ethanol industry generated more than $5 billion in economic activity last year and supported more than 12,600 jobs, according to a report that the Minnesota Department of Agriculture (MDA) released Wednesday.
 
The report also found that the state’s 21 ethanol plants have the capacity to produce 1.1 billion gallons of ethanol, which puts Minnesota fifth among all states in terms of production capacity.
 
Ethanol added $912.3 million to the value of the state’s corn crop in 2011—the second-highest annual sum. (Ethanol added $956.6 million to the value of Minnesota’s corn crop in 2008.) Additionally, every bushel of corn processed into ethanol generated $2.07 in revenue.
 
Last year was unique in that ethanol producers boosted production to take advantage of a federal production tax credit that expired at the end of 2011—which boosted the amount of ethanol for sale and then lowered the demand for production in the first part of 2012. Several ethanol plants within the region, including Denver-based Biofuel Energy Corporation’s Fairmont plant, have been idled this year.
 
Minnesota is home to 21 ethanol plants, and more than 11,000 corn farmers supply them with feedstock. If all of the state’s ethanol operations were combined under a single corporation, it would be the fifth-largest manufacturing company in Minnesota, according to the MDA report.
 
Despite the recent lag in ethanol production, the industry has been a huge contributor to Minnesota’s economy: Every dollar invested in building ethanol plants within the state between 1990 and 2011 generated $8.13 for the state’s economy, the report found.
 
“While there have been ups and downs in the ethanol industry, the fact is it’s a huge advantage for us to keep more of the value of the corn we produce rather than ship it to another state or country as a raw commodity,” MDA Economist Su Ye said in a prepared statement. “The ethanol industry is an important economic driver that adds value to every bushel of corn grown by the roughly 11,000 farmers who supply it to the plants.”
 
Minnesota currently exports 42 percent of its corn, while 39 percent is processed. By contrast, the United States as a whole exports 12 percent of its corn, and 50 percent is processed.