Getting Back to Basics

It's important to remind ourselves that ethanol is about revitalizing small towns and farms in rural America, writes Mike Bryan. A 50 MMgy ethanol plant will generate nearly $200 million in yearly revenue in DDGS and ethanol sales alone.
By Mike Bryan | August 20, 2014

There is a side to ethanol that transcends politics. A side that seldom enters the discussion anymore but was one of the primary cornerstones of ethanol’s development. The real good news story is the economic impact that ethanol production provides to small towns all across the breadbasket of America.

A 50 MMgy ethanol plant will generate in ethanol and DDGS sales alone nearly $200 million per year in revenue. A vast majority of that revenue is spent within a 50-mile radius of the plant. Wages, energy, feedstock, local goods and services, taxes and a host of other services are just the tip of the iceberg when it comes to the local and regional distribution of revenue from an ethanol plant.

I know many will say, we already know that, and I’m sure you do, but I think it’s important that from time to time we remind ourselves that ethanol isn’t just about the renewable fuels service, rail cars, China exports, Brazil imports and food vs. fuel, but it’s also about small towns and farms that dot every country road in America.

A 50 MMgy ethanol plant will consume more than 18 million bushels of corn and often pay a premium over market price up to 5 cents per bushel. That creates an additional $900,000 in farm income. That additional farm income is spent on tractors, combines, trucks, equipment and it’s mostly spent in a relatively small radius of the farm.

Small towns that were limping along trying to keep main-street open have been revitalized. Millions of dollars pumped into the economy not just during the construction phase, but ongoing year after year, decade after decade. When we talk about trickle-down, there probably are few better examples than the money generated from an ethanol plant moving through the community. Ask any mayor of a small town with an ethanol plant and they will vigorously relate the impact the plant has had on the community and the region.

When we talk about ethanol, we should always try to weave into the conversation the economic impact it creates. Of course the technical, political and environmental aspects of the industry will require our attention, but there’s also a good news story that often goes untold. It’s a vitally important part of our story and, frankly, it’s a factor that has probably sustained this industry when Congress may have otherwise been inclined to turn its back on ethanol.

So while I understand that I may be preaching to the choir, I would challenge everyone involved in this industry to take the time to fully understand the rural economic impacts of ethanol. We should all have that information at the ready and to be able to share when the opportunity presents itself. Perhaps it’s time we start getting back to the basics of why we are here in the first place.
That’s the way I see it.


Author: Mike Bryan
Chairman, BBI International
mbryan@bbiinternational.com