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MFA OIL
Ethanol is a local way to re-fuel rural economies
By Sara Muri
Ethanol made from corn is a high octane, clean burning, renewable fuel for vehicles. But if you ask the people from towns with ethanol plants, they’ll tell you ethanol is also a fuel for this state’s rural economies. In the past 6 years, four Missouri communities have experienced substantial growth due to innovation, hard work and corn.
Ethanol: currently speaking
Missouri is the home to four operating ethanol plants. While dedicated farmers and agricultural organizations have invested years of hard work to help grow the state’s ethanol industry, the industry itself is still relatively young. Corn was first ground in a Missouri ethanol plant in May 2000 at Northeast Missouri Grain near Macon. Golden Triangle Energy Cooperative near Craig followed suit in 2001, Mid-Missouri Energy in Malta Bend began operation in 2005, and Missouri Ethanol located in Laddonia opened this fall.
The construction of these plants has already greatly contributed to Missouri’s economy. Although building a plant has a one-time economic impact, the ripples are felt beyond the city limits and Missouri’s border. According to the 2006 study, Employment and Economic Benefits of Ethanol Production in Missouri, prepared by the University of Missouri’s Commercial Agriculture Program, the construction of Missouri’s existing four ethanol plants has:
• created 1,801 U.S. jobs,
• increased the U.S. labor income by $80 million,
• added $201 million to total U.S. output.
Even after all of the concrete is poured and the walls are built, the ethanol plants’ economic impact continues to reverberate throughout the economy. The study found that the four producing plants will:
• distill 156 million gallons of ethanol per year,
• provide 154 full-time and 11 part-time jobs,
• combine for a $14 million increase in labor income,
• create a net increase of $205 million in total output to Missouri’s economy.
It is astounding to realize that four farmer-owned Missouri cooperatives are playing such a large role in our local, state and national economies.
Thanks to the burgeoning homegrown fuels industry, Missouri corn farmers are also seeing a strengthening of their bottom line. Nearly 58 million bushels, around 15 percent of the state’s corn production, is purchased annually to feed the four plants.
This increased consumption has raised the value of Missouri’s corn crop by $41 million at the farm level. Put simply, on average, Missouri’s corn basis per bushel has increased 10 to 15 cents.
The benefits of Missouri’s ethanol plants do not just show up in dollar signs. During the ethanol fermentation process, only the starch portion of the corn is used, leaving a feedstuff containing concentrated protein, vitamins and minerals. This byproduct, commonly called dried distillers grains (DDGs), is a component of livestock and poultry feed. Missouri’s ethanol plants are currently producing 437,025 tons of DDGs annually.
Ethanol: fast forward
A major factor helping to strengthen corn markets is the supportive government policies agreed upon by farmers, legislators and industry leaders. Just in the last year, corn growers celebrated the passage of a 7.5 billion gallon federal Renewable Fuels Standard included in the 2005 Energy Policy Act and the passage of the Missouri Renewable Fuel Standard, which requires 10 percent ethanol be blended in virtually all gasoline sold statewide.
These policies, as well as the incentive programs, have built the bedrock of Missouri’s ethanol industry.
It is predicted that by 2008, Missouri will be producing over 350 million gallons of ethanol each year.
This would occur due to new plant construction and current plant expansion. At a 350-million-gallon capacity, around 124 million bushels (about one-third of Missouri’s corn crop) would be dedicated to ethanol production. This increase in corn grind is projected to increase corn value by $73 million. More than 5,600 jobs will be supported with the production of more than a million tons of DDGs.
The next time you are out touring the countryside, drive through Macon, Craig, Malta Bend or Laddonia. See for yourself and take a moment to reflect on an industry that is helping to reshape rural communities.
Sara Muri is an agriculture journalism student at the University of Missouri-Columbia and intern with the Missouri Corn Growers Association.
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