Ethanol contributes $2.5 B to Minnesota economy in 2009

Impact will grow 24 percent this year

 A new report from Minnesota Department of Agriculture shows ethanol contributed $2.5 billion to the state economy in 2009 and directly supported 6,800 jobs. While the state looks for ways to maintain its current path of economic recovery, ethanol’s economic impact is expected to grow to $3.1 billion this year, a 24 percent increase. Likewise, the industry will add 1,500 jobs this year.

 If not for ethanol and other growing renewable energy sources like wind and solar, Minnesota would have to import all of its energy. Though Minnesota has no oil production within its borders, it will produce an estimated 1.1 billion gallons of the cleaner burning renewable fuel this year. The state consumes roughly one third of that ethanol, thanks to a requirement to blend ten percent ethanol into every gallon of gas. The growing use of E85 fuel by flexible fuel vehicle owners is also increasing ethanol use in Minnesota.

 However, the state produces a surplus of more than 700 million gallons above its own needs, making ethanol a huge benefit to the state’s balance of trade.

 The increase of Minnesota’s ethanol requirement to 20 percent in 2013, and the anticipated allowance of 15 percent ethanol nationwide would further accelerate the economic impact of biofuels here.

 Minnesota Corn Growers Association President DeVonna Zeug says the ethanol industry is an important economic driver for the state. 

 “The ethanol industry is adding value to every bushel of corn we grow right here in our state.  When we’re able to keep more of the value of what we produce – rather than give it up to another state or another country – it’s a huge advantage for Minnesota,” said Zeug.

 Many of the state’s 80,000 farms produce corn, tallying an annual harvest of more than a billion bushels, and putting Minnesota consistently in the top five states for corn production. The increased profitability to corn from ethanol production has allowed many farmers in Minnesota to stay in business and even grow. And this helps the state economy as a whole to weather even the toughest economic adversity.

 The job creation strength of the biofuels industry makes it an indispensable addition to Minnesota. Though the Midwest fared better than much of the nation, it is still down 452,000 jobs, which is a loss of 3.5 percent since the economic downturn, according to Professor Ernie Goss, an economist at Creighton University.

 It is safe to say that no other sector in Minnesota expects a 22 percent job growth rate this year.

 Minnesota Agriculture Commissioner Gene Hugoson says the rebound is good news for the state’s 21 ethanol plants, half of which remain farmer-owned cooperatives.  

 “The ethanol industry’s downturn in 2009 was felt on farms and in our rural communities,” said Hugoson. “This year is looking much better in terms of increased production, economic impact and employment.”      

  MDA’s 2010 Minnesota Ethanol Industry Report can be viewed online at www.mda.state.mn.us/ethanol.

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