Ethanol Industry Contributed $2.1 Billion To Minnesota's Economy In 2015

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MINNEAPOLIS, March 7 – Minnesota’s ethanol industry contributed $2.13 billion to the state’s gross domestic product in 2015, according to a new study by ABF Economics.

The study, commissioned by the Minnesota Bio-Fuels Association, said the industry generated $7.37 billion in gross sales in 2015 for Minnesota businesses.

This, in turn, generated $1.6 billion worth of income for Minnesota households, supported 18,116 full-time jobs in the state and contributed $93 million to state and local taxes last year.

“The ethanol industry continues to be a significant contributor to Minnesota’s economy and is vital to continued economic growth in the state,” said Tim Rudnicki, executive director of the Minnesota Bio-Fuels Association.

For the study, ABF Economics used the Impact Analysis for Planning (IMPLAN) economic model to construct a model of the Minnesota economy including the sectors that support the ethanol industry, the links between them and the level of economic activity.

“Ethanol plants provide jobs and income not only for people who work at the plants, but also for businesses that sell ethanol plant supplies including Minnesota farmers who produce most of the corn used by Minnesota’s biofuel industry,” noted John Urbanchuk, managing partner of ABF Economics.

Jobs induced by the ethanol industry in Minnesota, the study said, included jobs in retail trade, health care, natural gas distributors, banking and finance.

The study said Minnesota’s 21 ethanol plants spent $2.05 billion in 2015 to produce 1.2 billion gallons of ethanol, 3.6 million tons of dried distiller’s grains (DDGs) - which is a high-protein animal feed - and 198 million lbs of corn oil.  

The volume of ethanol produced last year, the study said, was 11 percent higher than 2014.

The study said the 3.6 million tons of DDGs produced by the ethanol industry last year was sufficient to meet the annual feed requirements of the entire inventory of cattle and calves in Minnesota or more than 2.7 million beef and dairy cattle.

This, it said, was because one ton of DDGs replaces 1.22 tons of feed consisting of corn and soybean meal. As such, the study said the livestock and poultry industry in Minnesota required less corn and soybean meal.

In addition, ABF Economics said the ethanol industry’s output of 198 million lbs of corn oil is used to produce biodiesel.

“If all of the corn refiner’s oil produced by Minnesota ethanol plants was used as a biodiesel feedstock, it could produce more than 26 million gallons of biodiesel, or more than 40 percent of the biodiesel produced by Minnesota’s biodiesel plants,” the study said. 

Read the full study here