Ethanol's economic impact is huge

Thanks to Minnesota CGA Pres. Schwarz for writing, and thanks to Wesley Clark for providing him some ammo, and John Urbanchuck as well, to support American farmers and the ethanol industry.
By Susanne Retka Schill | February 28, 2011

One of the annual reports done around the National Ethanol Conference comes from economist John Urbanchuck. The story we’re running about that report is included in this week’s newsletter and includes a link to the complete report.

A couple of points I’d like to note here.

One, the estimated tax revenue to the feds and states from the direct and indirect impacts of the ethanol industry on GDP and income more than covers the cost of the tax incentives. Urbanchuck calculates the feds saw $8.6 billion in revenue that can be attributed to the economic activity stimulated by the U.S. ethanol industry, and state revenues totaled $4.8 billion. The estimated cost of the two primary federal tax incentives, the blenders credit and small ethanol producer credit, was just over $6 billion in 2010.

Secondly, the ethanol industry bought around $18 billion in corn.. The direct income impact is $448 million to the agriculture sector, according to Urbanchuck, but the indirect impact is far greater at $17.68 billion.

Related to that report, I read something else this morning. I get an E-newsletter from an outfit called “The Hand That Feeds Us” which comments on a wide variety of agriculture topics. Today they used an article written by Greg Schwarz, a corn, soybean and turkey producer who is serving as president of the Minnesota Corn Growers Association. It appeared in a Tampa, Fla., newspaper in advance of the annual Commodity Classic trade show. In it, he quotes Ret. Gen. Wesley Clark (co-chair of Growth Energy).  “When you hear Wesley Clark preach about the importance of the ‘thin green line’ to America's security, you assume he's talking about soldiers. After all, Clark served as a general in the U.S. Army and was the Supreme Allied Commander of NATO. Recently though, Clark has used the term to refer to America's farmers and ranchers….. To illustrate just how tenuous the situation has become, Clark uses a mind-blowing stat. ‘More people pass through Wal-Mart's doors every 21 minutes to buy groceries and clothes than there are farms to grow the goods stocking Wal-Mart's shelves.’”

Schwarz took the time to write a piece for the newspaper, and pulled some information from a recent speech he read about to illustrate his point about how vital it is to understand the role of American agriculture.

Thanks to Schwarz for that effort, and thanks to Wesley Clark for providing him some ammunition, and for Urbanchuck providing the ethanol industry some potent ammo as well. And thanks to the organizations that back those two gentlemen’s work.