Study looks at ethanol industry’s economic contribution

A report says that Minnesota’s ethanol industry accounted for $2.34 billion of the state’s gross domestic product in 2014.
The study, conducted by ABF Economics, found that the industry generated $7.6 billion in gross sales for Minnesota businesses and supported 18,630 full-time jobs in 2014. The study also says the industry generated $1.74 billion in household income in the state and $132 million in state and local taxes.
ABF Economics estimated the impact of the ethanol industry on Minnesota's economy by applying expenditures by the relevant supplying industry to the final demand multipliers for value-added output, earnings and employment.
"In this study, ABF used the IMPLAN (Impact Analysis for Planning) 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," said John Urbanchuk, managing partner for ABF Economics and co-author of the study.
The report says the ethanol industry in Minnesota spent approximately $2.7 billion on raw materials (mostly corn), other inputs, goods and services to produce 1.1 billion gallons of ethanol and primary co-products dried distiller's grains (DDGS) and corn refiner’s oil.
The study says a recent U.S. Department of Agriculture study concluded that 1 ton of DDGS is the equivalent of 1.22 tons of feed consisting of corn and soybean meal.
The 3.3 million tons of DDGS produced by the industry last year was sufficient to meet the annual feed requirements of nearly 2.5 million beef and dairy cattle, or the entire inventory of cattle and calves in Minnesota.
"Thus, given the availability of DDGs from ethanol production, the livestock and poultry industry require less grain corn and soybean meal to feed the same number of animals and produce the same amount of meat and dairy products," the study said.