SD ethanol industry has $3.8 billion impact on 2012 economy

By South Dakota Ethanol Producers Association | July 16, 2013

The South Dakota Ethanol Producers Association released a study, “The Economic Impact of the Ethanol Industry on the South Dakota Economy in 2012,” showing more than a $3.8 billion overall impact, more than a $2 billion increase from 2004. This includes the direct value of the product produced, the indirect effect as a result of purchases by the industry and the increase in household spending resulting from the increased economic activity in the state.

“As an industry, the most visible impact is the billion gallons of ethanol production, and more than 350 million bushels of corn purchases,” said South Dakota Ethanol Producers President Dana Siefkes-Lewis of Redfield Energy. “But it’s so much more than corn and ethanol. The plants drive the local economies because they buy locally. They purchase things like vehicles, fuel, paper towels, office supplies and everything else a large employer needs to operate. Each local ethanol plant employs a top-notch workforce, while churning out more than 3 million tons of dried distillers grains for livestock feed. This study quantifies both the growth of the industry since 2004 and the significant and wide-reaching positive impact on South Dakota’s ag-based economy.”

According to the study conducted by Gary Taylor, associate professor of economics, and Lisa Elliot, assistant professor of economics, both at South Dakota State University, the South Dakota ethanol industry has grown more than 441 percent in sales of ethanol and dried distillers grains since 2004, estimated to be in excess of $2.983 billion, with South Dakota producing about 7 percent of the nation’s ethanol supply. The corn basis and land values have also increased. Indirect business tax revenue in 2012 was more than $18.5 million, while the industry contributed about $200 million in direct value added to the state economy.

“The ethanol industry has been a great investment for the people of South Dakota,” said Commissioner Pat Costello with the Governor’s Office of Economic Development. “The industry has grown significantly in the last decade and continues to pay dividends for tax payers, our agriculture industry, our high-quality workforce and our rural communities.”

In 2012 the industry employed 1900 people with an average annual salary of about $60,000, an increase from 473 employees in 2004, with an additional 7,654 jobs in 2012 as a result of the impacts of the ethanol industry.

“Our employees buy houses, groceries and insurance,” added Siefkes-Lewis. “And let’s not forget, many of our employees have returned to South Dakota to raise their family with ethanol-related career opportunities. They are involved in the communities, contributing by volunteering or taking on leadership positions. These are impacts that cannot be quantified, but are just as significant.”

The South Dakota Ethanol Producers Association was formed in 1992 to represent the ethanol industry in South Dakota. The non-profit, trade group represents 15 plants with more than 1 billion gallons of ethanol production capacity and 3.2 million tons of Distillers Grains livestock feed production. The association’s mission is to foster the development and growth of the ethanol industry in South Dakota through legislation, education, promotion and infrastructure development.