Minnesota ethanol industry contributes $2.13 billion to state GDP

By Erin Voegele | March 14, 2016

The Minnesota Biofuels Association recently commissioned a study by ABF Economics that has determined Minnesota’s ethanol industry contributed $2.13 billion to the state’s gross domestic product last year.

The state currently has 21 operating ethanol plants, with an annual capacity of more than 1.2 billion gallons. Collectively, the plants require approximately 423 million bushels of corn, which equates to nearly 30 percent of the state’s 2015 corn crop.

According to the study, Minnesota’s ethanol output increased 11 percent in 2015, reaching more than 1.2 billion gallons. The state’s ethanol industry spent an estimated $2.1 billion on raw materials, other inputs, goods and services last year. When compared to 2014, total spending to produce ethanol was down due to lower prices for corn and other inputs.

The study indicates the $2.1 billion in expenditures, when circulated fully through the Minnesota economy, generated $7.4 billion in gross sales for state businesses and generated $1.6 billion worth of income for households within the state. In addition, the Minnesota ethanol industry supported more than 18,000 full-time jobs and contributed $93 million to state and local government tax rolls.

"The ethanol industry continues to be a significant contributor to Minnesota's economy and is vital to continued economic growth in the state," said Tim Rudnicki, executive director of the Minnesota Bio-Fuels Association.

"Ethanol plants provide jobs and income not only for people who work at the plants, but also for businesses that sell ethanol plant supplies including Minnesota farmers who produce most of the corn used by Minnesota's biofuel industry," noted John Urbanchuk, managing partner of ABF Economics.

To complete the study, ABF Economics used the Impact Analysis for Planning (IMPLAN) economic model to construct a model of the Minnesota economy, including the sectors that support the ethanol industry, the links between them, and the level of economic activity.

A full copy of the study can be downloaded from the Minnesota Bio-Fuels Association website.