Grain Bins


SD Corn Council releases Ethanol Impact Study

Posted on June 12, 2006

Ethanol production in South Dakota grows into a billion-dollar industry

(SIOUX FALLS) — The ethanol industry in South Dakota is a major economic engine driving the state’s economy.

That’s the message from the South Dakota Corn Utilization Council and South Dakota Corn Growers, who released the results of a study confirming that ethanol production has become a billion-dollar industry in the state.

“The Economic Impact of Ethanol Plants in South Dakota” was done by Randall M. Stuefen of Stuefen Research, LLC.

It was completed December 27, 2005, and provides an economic impact analysis of ethanol production for 2004. South Dakota’s ethanol industry is expanding again in 2006.

“There is a lot of money that is going into the local economies all over the state,” said Brian Woldt, president of the South Dakota Corn Utilization Council and a producer from Wentworth. “This is new wealth, and I believe in the power of new wealth. These dollars are used locally and will create jobs and economic development in areas where there may not have been opportunities before.”

The major findings of the study are:
• Total economic activity created by the production of ethanol was $1.055 billion.
• 400 million gallons of ethanol were produced by South Dakota plants in 2004.
• To produce 400 million gallons of ethanol, 145 million bushels of corn were purchased – a yield of 2.76 gallons
of ethanol per bushel of corn.
• The local price basis for corn is estimated to have improved 20 to 30 cents per bushel between 1999 and 2004.
• That increase has resulted in $50 to $100 million in additional income for producers in the state.
• For every dollar of ethanol produced in South Dakota, 9.5 cents of new income will be created.
• New income or new wealth generated throughout the economy as a result of ethanol plant operations is estimated
at $255.2 million.
• For every million dollars of ethanol produced, $446,100 dollars of goods and services will be purchased from
other businesses in the state.
• Employment at the 10 plants in the study was 472 full or part-time jobs.
• Total employment impact throughout the state from operation of ethanol plants was estimated to be between
3,525 and 3,978 full or part-time jobs.
• The ethanol industry paid more than $3 million in sales tax on energy expenses in 2004.
• Ethanol production capacity in South Dakota has grown from 35 million gallons in 2000, to 420 million gallons
in 2004, a 1,300% increase.

“Another positive economic sign for the future of family farms in this state is the fact that more than 8,000 South Dakota farm families are invested in our ethanol industry,” Woldt said. “That is the largest number of farmer/investors
in the nation.”

By the end of 2006, approximately 275 million bushels of South Dakota corn will be used for ethanol. And over 2 million tons of dried distillers grain will be produced by South Dakota ethanol plants to be used as livestock feed.

“We are seeing more and more corn being grown in South Dakota, and the study shows that as we’re growing more corn we’re producing more ethanol,” said Bill Paulsen, President of the South Dakota Ethanol Producers and
General Manager of Heartland Grain Fuels in Aberdeen and Huron. “The industry will continue to grow within the state and outside of the state.”

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