UNL report highlights ethanol plants’ impact on Nebraska economy
A recent University of Nebraska–Lincoln study underscores the ethanol industry’s pivotal role in Nebraska’s economy. Between 2021 and 2023, the state produced over 2 billion gallons of ethanol annually, generating an average economic impact of $6.2 billion per year. The sector directly employed 1,800 individuals, with average salaries of approximately $80,000. Ethanol remains Nebraska’s third-largest agricultural sector, following corn and cattle.
In the 41 years since its modest modern beginnings just east of Hastings, Nebraska’s ethanol industry has grown into a “significant and stable” force in the state, responsible for thousands of jobs and billions of dollars in economic activity.
In fact, with total output valued in the neighborhood of $6 billion per year for the years 2021 through 2023, the ethanol industry was Nebraska’s third-largest agricultural sector by value, behind cattle and corn production and well ahead of soybeans.
That’s the takeaway from a new economic impact report from the University of Nebraska-Lincoln examining ethanol and its co-products.
“Given the industry’s ability to rebound after a period of low ethanol prices and the production complications during COVID-19, it is our opinion ethanol will continue to be a large driver of economic impact for an extended period of time,” said Tim Meyer, an ag economist and one of the report’s authors, in a news release announcing the report’s issuance. “It continues to provide stable employment and billions of dollars generated for small communities across the state and Nebraska overall.”
While the report doesn’t take into account the economic impact of ethanol production on corn production itself as a separate economic activity, the Nebraska Corn Board reports that the ethanol industry consumes around 750 million bushels of Nebraska corn each year.
The ADC-1 plant opened on East U.S. Highway 6 in 1984 and was acquired by Chief Industries Inc. of Grand Island in 1990. As of 2022, the Chief Ethanol Fuels Hastings plant had the equivalent of 51 full-time employees and permitted annual production capacity of 70 million gallons, according to the UNL study. (Chief also operates a 50-million-gallon plant at Lexington.)
Other Tribland ethanol plants include POET Bioprocessing at Fairmont (60 employees, 132 million gallons of permitted annual production capacity) and KAAPA Ethanol LLC at Minden (43 workers, 85 million gallons).
KAAPA also operates a 135-million-gallon plant at Ravenna and the KAAPA Ethanol Partners Aurora plant, previously known as Aurora Cooperative Ethanol LLC, with capacity of 90 million gallons.
Nebraska’s 25 plants for those three years had combined employment of around 1,800 full-time workers and combined permitted production capacity of 2.385 billion gallons annually, while actually producing just north of 2 billion gallons per year. Total labor income associated with those jobs amounted to $180 million to $182 million per year; the average pay (wages plus benefits) for a job in ethanol production was about $80,000 per year.
When jobs indirectly related to ethanol plant operations are taken into account, the total number of jobs has ranged from 3,541 to 5,851 from 2014-23, with overall annual labor income impact of $255 million to $466 million. The high mark for jobs was hit in 2022.
The UNL study was written by Meyer and Kathleen Brooks of UNL’s Department of Agricultural Economics and Eric Thompson of UNL’s Bureau of Business Research. Funding support for their work was provided by the Nebraska Ethanol Board.
According to the report, Nebraska produced 2.036 billion gallons of ethanol in 2021, 2.018 billion gallons in 2022, and 2.008 billion gallons in 2023.
The value of the ethanol, distillers grains, corn oil and other co-products over those three years averaged $6.221 billion per year, which was 58% more than the average for the previous seven years.
The industry’s total economic impact was $7.25 billion in 2021, $8.19 billion in 2022, and $6.28 billion in 2023.
Nebraska is the nation’s No. 2 producer of ethanol, with only Iowa churning out more.
“For every dollar of ethanol produced or sold, 45 cents of co-products were produced and sold,” said Thompson, who is Karol H. Nelson Professor and chair of economics and director of the Bureau of business Research, in the UNL news release. “The evidence shows that the ethanol industry is an important part of Nebraska’s value-added agriculture sector.”
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Source : Hastings Tribune
