Ethanol brings $2 billion per year to Minnesota's economy

By Minnesota Bio-Fuels Association | February 27, 2017

The ethanol industry continued to boost Minnesota's economy in 2016, contributing $1.98 billion to the state's gross domestic product (GDP).

A new study released by ABF Economics, which was commissioned by the Minnesota Bio-Fuels Association, said Minnesota’s ethanol industry produced 1.18 billion gallons of ethanol last year. This in turn generated $6.67 billion in gross sales for Minnesota businesses and supported nearly 18,000 jobs in 2016.

“Minnesota’s ethanol industry remains a significant contributor to the state’s economy and supports thousands of jobs in both rural and urban parts of the state,” said Tim Rudnicki, executive director of the Minnesota Bio-Fuels Association.

ABF Economics said Minnesota’s ethanol industry generated nearly $1.5 billion in household income and paid $80 million to state and local taxes in 2016.

“Spending associated with renewable fuels production stimulates aggregate demand, supports the creation of new jobs, generates additional household income, and provides tax revenue for state and local governments.

“ABF estimated the impact of the ethanol industry on the Minnesota economy by applying expenditures by the relevant supplying industry to the appropriate final demand multipliers for value added output, earnings and employment,” said John Urbanchuk, managing partner at ABF Economics.

The ethanol industry’s GDP contribution was largely driven by the production of ethanol and its co-products, research and development, corn production as well as plant expansions/renovations and the installation of new E15 and E85 stations in 2016.

According to the study, the ethanol industry used 410 million bushels of corn (26 percent of Minnesota’s 2016 corn crop) to produce 1.18 billion gallons of ethanol, 3.5 million tons of dried distillers grains with solubles (DDGS) and 244 million pounds of corn oil.

It said the 3.5 million tons of DDGS produced was sufficient to meet the annual feed requirements of over 2.5 million beef and dairy cattle, or the entire inventory of cattle and calves in Minnesota.

As for corn oil, the study said the 244 million pounds produced could produce 33.5 million gallons of biodiesel, which is over 26 percent of Minnesota’s biodiesel capacity.  

Apart from jobs at ethanol plants, the ethanol industry supported jobs in agriculture, construction as well as input and component suppliers in 2016. This, in turn, impacted jobs in industries such as healthcare, food and beverage, accounting, banking and finance and retail.

Read the full report here