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Nebraska's ethanol industry thrives amid challenges

Nebraska's ethanol industry thrives amid challenges

By Scout Nelson

The ethanol sector remains a cornerstone of Nebraska's economy, showcasing remarkable resilience by maintaining near-historic production levels in 2020. This strength comes despite facing hurdles such as decreased ethanol prices and the COVID-19 pandemic's impact on production.

Findings from a new study by the University of Nebraska-Lincoln illuminate the vital role the ethanol and its co-products industry plays in fueling the state's economic engine.

In a year fraught with challenges, the ethanol industry directly supported 1,758 jobs, predominantly in smaller communities, demonstrating its widespread impact across Nebraska. The industry's contribution to the state's economic activity topped $4.4 billion in 2020, underlining its significance and potential for future growth.

The industry has adeptly navigated through fluctuating ethanol fuel prices by diversifying its co-products. From first offering dried distiller’s grains, the sector expanded its portfolio to include valuable products such as wet and modified distiller’s grains, corn oil, hand sanitizer, starches, and high fructose corn syrup.

This diversification strategy has not only provided insulation against price cycles but also propelled the industry's total production value to $3.433 billion in 2020, with co-products representing 35.4% of this value.

Comparing the industry’s output to other agricultural sectors, ethanol and co-product production averaged 35% of cattle production, 63% of corn production, and 141% of soybean production over five years from 2016 to 2020. These figures underscore the industry's substantial contribution to Nebraska's agricultural landscape.

Tim Meyer, an associate professor at the University of Nebraska-Lincoln and a co-author of the report, emphasized the ethanol industry's role as a dynamic economic driver. Leveraging IMPLAN, a sophisticated modeling technique, the study further revealed the industry's ripple effect, generating an additional 6,242 jobs and $977 million in economic activity beyond its direct output.

Meyer expressed confidence in the ethanol sector's enduring impact on Nebraska's economy, citing its adaptability and sustained economic contributions.

The study, a collaborative effort between the University of Nebraska-Lincoln’s Department of Agricultural Economics, Bureau of Business Research, and the Nebraska Ethanol Board, paints a promising picture of an industry poised for continued growth and influence.

Photo Credit -shutterstock-dickgage

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