By Ryan Evans
The Nebraska ethanol and co-products industry remains a significant and stable force that contributes billions of dollars to the state’s economy, according to a new study from the University of Nebraska–Lincoln.
The study analyzes the industry’s economic impact from 2021-2023 and was conducted by the university’s Department of Agricultural Economics and Bureau of Business Research, in partnership with the Nebraska Ethanol Board. It reveals that the industry’s economic output compares favorably to the overall economic output of the state, other ag sectors and non-ag economic drivers. The positive impact of the Nebraska ethanol and co-products industry is spread throughout the state, directly creating 1,800 jobs at an average annual salary of about $80,000 between 2021 and 2023.
The study found that ethanol production in Nebraska has remained steady, despite fluctuations in the general economy. In 2020, overall ethanol production was 1.847 billion gallons. In 2021, 2022 and 2023, ethanol production totaled 2.036 billion, 2.018 billion and 2.008 billion gallons, respectively. With the value of co-products added in, the total value of the industry’s output in each year of the study was: $5.699 billion (2021), $6.932 billion (2022) and $6.031 billion (2023).
The ethanol industry continues to rank as the state’s third-largest agricultural sector, trailing only corn and cattle in terms of agricultural output, and is significantly ahead of soybean output. Overall, the value of ethanol output in Nebraska from 2021-2023 was equal to 68% of corn, 50% of cattle and 169% of soybeans.
The production of ethanol co-products helped to offset low ethanol prices during the period covered in the study. In addition to growing markets for distillers grains in past years, products like corn oil, corn syrup and hand sanitizer contributed to total co-product production that was 45% of ethanol value in both 2022 and 2023.
“For every dollar of ethanol produced or sold, 45 cents of co-products were produced and sold,” said Eric Thompson, Karl H. Nelson Professor and chair of economics and director of the Bureau of Business Research, who co-authored the report. “The evidence shows that the ethanol industry is an important part of Nebraska’s value-added agriculture sector.”
New to this year’s study was a comparison of the ethanol industry to the overall Nebraska economy. In 2022, the economic impact attributed to the ethanol industry was $8.18 billion. In that same year, Nebraska’s annual gross domestic product was $167.5 billion. To put this in perspective, the report compares the ethanol industry to the overall economic impact of the College World Series, which was $88 million in 2019, growing to $115 million in 2024. The overall economic impact of the ethanol industry is more than 50 times that of the College World Series’ 2024 total.
Ethanol and co-product production were directly responsible for the equivalent of 1,800 full-time jobs between 2021 and 2023. These jobs were spread across the state, averaging 75 jobs per plant. The minimum number of jobs directly created by an ethanol plant during this period was 27, with a maximum of 430. For reference, half of the plants included in the study are in towns with fewer than 1,900 residents.
According to the modeling technique the study used to quantify indirect economic activity, the ethanol industry is responsible for creating 7,162 additional jobs and another $1.255 billion of economic activity throughout the state in 2022.
It is not surprising that ethanol plants are general economic activity drivers in the state, according to Tim Meyer, associate professor of practice in the Department of Agricultural Economics, and one of the researchers on the study.
“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,” Meyer said. “It continues to provide stable employment and billions of dollars generated for small communities across the state and Nebraska overall.”
Source : unl.edu