Ethanol, the Key to Recovery of the Farm Economy
The U.S. ethanol industry added $42.1 billion to the nation’s gross domestic product and supported nearly 340,000 jobs in 2016, according to a just released study. The report suggests that continued growth of the renewables sector is the key to recovery in the farm economy. Matt Merritt, with POET, the nation’s largest ethanol producer and operator of the majority of ethanol plants in Indiana, says the key to turning the current dismal farm economy around is growth in the ethanol sector, “Ethanol can play the most important role in overcoming the challenges that face rural America.”
Merritt points to history as his proof, “When the ethanol industry was growing and expanding, land prices were going up, corn prices were going up, that is when farm incomes were going up. I don’t think it is a coincidence that when the ethanol industry stopped growing that is when ag producers started facing their challenges.”
“The importance of the ethanol industry to agriculture and rural economies is particularly notable,” the study found. According to the analysis, the production and use of 15.25 billion gallons of ethanol last year also:
contributed nearly $14.4 billion to the U.S. economy from manufacturing;
added more than $22.5 billion in income for American households;
generated an estimated $4.9 billion in tax revenue to the Federal Treasury and $3.6 billion in revenue to state and local governments;
displaced 510 million barrels of imported oil, keeping $20.1 billion in the U.S. economy.
“As these figures show, growth of the U.S. ethanol industry clearly ripples throughout our economy,” said Renewable Fuels Association President and CEO Bob Dinneen. “Our industry produced nearly 340,000 jobs last year and displaced more than 500 million barrels of imported oil, bringing well-paid jobs to local communities that are helping a domestic energy industry. The footprint of the U.S. ethanol sector touches every consumer in every city. This study provides definitive proof that the U.S. ethanol industry is helping to power the country’s economic engine.”
“The ethanol industry is a strong contributor to the U.S. economy, bringing jobs and tax revenue, while helping to displace imported oil,” said Economist John Urbanchuk, the study’s author and a managing partner at ABF Economics. “Continued growth and expansion of the ethanol industry through new technologies and feedstocks will enhance the industry’s position as the original creator of green jobs, and will enable America to make further strides toward energy independence.”
Merritt urged all farmers to support renewable fuels as a way of bringing profitability back to the farm economy, “We are pushing e-15 into the marketplace. We need to get the product in front of consumer so they can see the great benefits.” He added, while e-15 is slow to penetrate the Midwest, it is going very well in large East Coast gasoline markets.