Ethanol’s Economic Impact on Nebraska

Ethanol production has been a boon to Nebraska’s economic vitality. According to a recent economic impact study conducted by the University of Nebraska-Lincoln economists. The study, entitled “Economic Impacts of the Ethanol Industry in Nebraska,” was published in mid-April. The study examined the economic impact of Nebraska’s ethanol industry from 2009 through 2014.

During that five-year period, Nebraska’s ethanol industry generated products valued between $4 billion and $6.6 billion annually. This value includes not only ethanol but also distillers grains, a livestock feed that is produced at ethanol plants.

“Nebraska has a unique advantage known as the “Golden Triangle,” said Tim Scheer, a St. Paul, Nebraska farmer and Chairman of the Nebraska Corn Board. “The combination of corn, livestock and ethanol production provides significant opportunity to add value at every step along the production chain – and that creates jobs, revenue and economic vitality from border to border in the state.”

Additionally, Nebraska is rivaling Texas as the top cattle-on-feed state due in large part to Nebraska’s readily available supply of corn and distillers grains.

Nebraska is in the enviable position of being the westernmost major producer of ethanol. Nebraska is one of the nation’s leading bioenergy exporters with 96 percent of its ethanol production leaving the state and is well positioned to serve the fuel demands of the United States. Additionally, 58 percent of the distillers grains is shipped out of the state, primarily to diaries in California and beef producers in Texas.

International demand for ethanol and its co-products also bodies well for Nebraska’s economic future. “Canada imports 40 percent of the U.S. ethanol exports and China imports 39 percent of the U.S. distillers grains,” said Tod Sneller, Nebraska Ethanol Board Administrator. “There is a strong demand throughout the world for ethanol and its co-products, so we continue to look for ways to expand the Nebraska market as well as international markets in an effort to bring more economic prosperity to Nebraska.”

While the recent study focused on the past five years, it is interesting to note that Nebraska’s ethanol production started in 1985 at 9 million gallons per year. By 1995, the industry was at 200 million gallons. A little over ten years later, that number had grown to 858 million gallons – and grew to over 2 billion gallons by 2011.

“The ethanol industry has been a huge economic driver for the entire state,” Scheer added. “In just 30 years, ethanol production has changed the landscape in Nebraska and is poised to help our state become a national leader in the production of bioenergy and livestock feed.”