Studies outline state-level benefits of the ethanol industry

By Erin Voegele | October 11, 2012

Two new studies were released this week, highlighting the positive effects the renewable fuel standard (RFS) has had in Minnesota and Ohio. One study, titled the “Minnesota Ethanol Industry: Ethanol Plants in Minnesota,” was published by the Minnesota Department of Agriculture, and provides an overview of the status of the state’s ethanol industry and the economic benefits it has created. The second study, titled the “Economic Impact Analysis of the Ethanol Industry in Ohio for the Ohio Ethanol Producers Association,” was completed by the Ohio State University Extension Community Development and provides an overview of the employment benefits ethanol production has brought to Ohio. 

The Minnesota study estimated that the return on investment on the state’s ethanol industry was 813% percent from 1990-2011. That means that every dollar invested in building an ethanol plant resulted in more than $8 generated for the state economy. The report also pointed out that 10 of Minnesota’s 21 ethanol plants are farmer-owned cooperatives that bring direct economic returns to farmers and rural communities.

Regarding corn production in Minnesota, the analysis showed that the state’s farmers harvested more than 1.2 billion bushels of corn in 2011, with a value of more than $7 billion. More than 11,000 of the state’s corn farmers who grow corn supply feedstock to the ethanol industry. According to the study, during the period from 2000-2011the ethanol industry added $2.10 to the value of a bushel of corn.

Regarding the employment impact of Minnesota’s ethanol industry, the study found that in 2011 the industry generated approximately $5 billion in total economic output and more than 12,600 jobs.

The Ohio study also pointed to clear benefits provided by the state’s ethanol industry, focusing on the construction and upgrade of ethanol plants and their ongoing operation. According to the analysis, new construction and additional upgrades of Ohio’s six ethanol plant represented $825 million in capital investment. The ongoing operation of those six facilities has resulted in 273 fulltime jobs and an annual payroll of $9.36 million per year.

When analyzed in terms of direct, indirect and induced impacts from both construction and operation, the industry added $1.1 billion in output to the state. Using the same parameters, the industry has supported 12,975 jobs and generated a total income $607 million.