Study shows ethanol impact on retail ag service sales

By North Dakota Farmers Union | August 14, 2014

Ethanol production in North Dakota generates significant income for retail agricultural service and supply dealers, roughly $700 million a year, according to a study recently released by the Center for Agricultural Policy and Trade Studies at North Dakota State University.

The study, commissioned by North Dakota Farmers Union (NDFU), directly links 10 percent of all agricultural retail sales to ethanol production.

“Growing corn for ethanol production is not only an important value-added market for farmers, it is a lucrative product for fuel suppliers to retail,” said NDFU President Mark Watne. “Thirteen cents of every sales dollar last year was directly related to ethanol production.”

The study outlined four immediate impacts of ethanol production: increased commodity prices, increased net farm income, increased agricultural inputs, and increased land prices.

According to the study, ethanol production in the U.S. was about 1.6 billion gallons in 2000. A decade later, America produced 12.7 billion gallons of ethanol, consuming nearly 37 percent of the U.S. corn crop. That increased demand raised corn prices from $2 per bushel on average in 2005 to almost $7 in 2012.

“Corn sets the price for all other commodities,” noted Watne. “It’s to our advantage to grow, sell and buy this home-grown renewable fuel.”

To view the study in full, go to AG STUDY