Study quantifies impact of biofuel on Iowa economy

By Erin Voegele | January 31, 2014

The Iowa Renewable Fuels Association released the results of an economic impact study conducted by John Urbanchuk of AVF Economics at the 8th Annual Iowa Renewable Fuels Summit in late January. The report highlights the impact of the renewable fuels industry on Iowa’s economy.

The analysis shows that Iowa’s ethanol industry experienced a small increase in output last year, with the state’s 41 operating ethanol plants producing at a rate of approximately 3.8 billion gallons. The state currently accounts for approximately 30 percent of all U.S. ethanol production. 

Urbanchuk’s report estimated that the renewable fuels industry in Iowa accounted for nearly $5.6 billion last year, which equates to approximately 4 percent of Iowa GDP. The biofuel industry also generated approximately $4.1 billion in household income in the state and supports more than 62,000 jobs in the state economy. That volume is equivalent to 4 percent of total state employment.

The ethanol industry alone generated $10.62 billion in purchases, $5.04 billion in GDP, and $3.74 billion in household earnings last year. It also supported 55,161 jobs.

The biodiesel industry generated $884.1 million in purchases, $519.2 million in GDP, and $313.2 million in household earnings. Biodiesel production also supported 7,073 jobs.

“The environment facing the renewable fuels industry improved modestly in 2013 and the economy of Iowa benefitted accordingly,” said Urbanchuk.  “Ethanol and biodiesel producers are part of a manufacturing sector that adds substantial value to agricultural commodities produced in Iowa.”

“While production and profits were sound, the renewable fuels industry took a pounding politically in 2013,” said IRFA Executive Director Monte Shaw in a statement.  “But I stand before you today to declare that the Iowa renewable fuels industry can take their punches and we are fighting back!  No one here ever thought it would be easy to earn market share away from the world’s most powerful and profitable industry.  The fact is, the world needs oil, but consumers also deserve the chance to choose lower cost renewable fuel blends.  So, we will never stop fighting to put the option of E15, E85 and biodiesel in front of every American consumer.”

A full copy of the study is available here.