PIXABAY

Jul 27, 2022

Study: Nebraska's Ethanol Industry Continues to Expand

University of Nebraska-Lincoln report shows economic impact in the state is over $4.5B

A recent study from the University of Nebraska-Lincoln shows the Nebraska ethanol industry produced over 2.25 billion gallons in 2019, resulting in a value of production for ethanol and co-products of greater than $4.04 billion.

The overall economic impact of the Nebraska ethanol industry is over $4.5 billion.

Gallons produced and value of production in 2019 both increased over 2017, the year of the previous report, when the state produced over 2.07 billion gallons of ethanol, valued at $3.76 billion.

Nebraska is the second largest ethanol-producing state in the nation

Nebraska continues to rank as the second-largest ethanol-producing state in the nation.

The overall value of ethanol and ethanol co-products averages 64% of corn production, 33% of cattle production and 131% of soybean production, making ethanol the third-largest agricultural industry in the state.

From 2010 to 2014, the ethanol industry employed 1,301 full-time employees, rising to 1,453 employees from 2015-2017.

These jobs led to primary employee income of $71 million from 2010 to 2014 and $97 million from 2015 to 2017.

In 2018 and 2019, the industry employed 1,460 full-time equivalents, leading to a labor income of $125 million and $13 million in indirect business taxes.

Production income tells a different story, as producer income averaged $34 million from 2010 to 2014 and only $11 million annually from 2015 to 2017, which were primarily caused by lower prices. The estimated proprietors’ income for 2018 to 2019 was $12 million.

Ethanol production is a net positive

Almost all of Nebraska’s ethanol and about half the state’s dried distillers’ grain and corn oil production are exported, meaning most production results in a net positive impact for the state.

The sales outside of Nebraska represent a direct economic impact, bringing new money into Nebraska’s economy.

The study’s results also suggest a positive impact on local corn cash prices, with an average increase of about 21.3 cents/bushel in the immediate areas near ethanol production facilities.

Boost from E15 rules

The study evaluated the economic impact of the Nebraska ethanol industry for the state of Nebraska in 2018 and 2019.

While the value of production for the ethanol and coproduct industry was lower in 2018 and 2019 than during the first half of the decade, both ethanol capacity and employment increased over the years of study, indicating a positive long-term outlook.

This future outlook could be bolstered by the new E15 rules.

The study concluded ethanol will continue to be a large driver of economic impact in the state of Nebraska for quite some time.

The report was produced by the Department of Agricultural Economics at Nebraska, in partnership with the Nebraska Ethanol Board.

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