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New state report provides insight into impact of ethanol industry

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Willmar, 56201
West Central Tribune
(320) 235-6769 customer support
Willmar Minnesota 2208 Trott Ave. SW / P.O. Box 839 56201

WILLMAR -- A recent report released by the Minnesota Department of Agriculture provides an in-depth look at our state's ethanol industry and its impact on Minnesota's economy, which in 2011 generated more than $5 billion in total economic activity and supported more than 12,600 jobs.

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One major economic benefit of the ethanol industry is the value that it adds to corn, which is already Minnesota's most valuable agricultural product in terms of cash receipts. According to the report, ethanol added $912 million to the value of corn in 2011, or $2.07 of additional revenue for every bushel of corn processed into ethanol.

The economic significance of the ethanol industry is evidenced by the fact that if all of Minnesota's ethanol plants were combined into a single corporation, it would rank number 5 among the largest manufacturing companies in the state.

The report also highlights the huge demand for corn that the ethanol industry has created. In 2011, Minnesota corn farmers harvested more than 1.2 billion bushels of corn and 440 million of those bushels, or about 37 percent, was devoted to the production of ethanol and its co-product, distillers dried grains.

Other items within the report that I found insightful and noteworthy included:

- While Minnesota ranks number 4 in corn production, it ranks number 5 in ethanol production. The top ethanol producing state is Iowa, followed by Nebraska, Illinois and Indiana.

- Minnesota currently has 21 ethanol plants with a total annual production capability of 1.1 billion gallons per year. Ten of the 21 ethanol plants are farmer-owned cooperatives, bringing direct economic returns to local farmers and rural communities.

- The state's 21 ethanol plants have annual production capabilities that range from 22 to 110 million gallons per plant, or 8 to 40 million bushels of processed corn.

- Minnesota's ethanol production capability of 1.1 billion gallons far exceeded the 237 million gallons that were consumed in the state in 2011. The remaining 880 million gallons, or about 79 percent of the ethanol produced in Minnesota, leaves the state.

- In terms of corn utilization, 42 percent of Minnesota's 2011 corn crop was exported, 17 percent was used for feed, and 39 percent was used for processing, which included processing for ethanol. In comparison, Iowa processed 68 percent of its 2011 corn crop.

- Minnesota ranks number 3 in distillers dried grains production with 2.95 million metric tons produced in 2011. Production of distillers dried grains displaced 60 million bushels of corn in the state's feed supply, or about 30 percent of Minnesota's total feed use in 2011.

For more information regarding Minnesota's ethanol industry, visit www.mda.state.mn.us/renewable.

Study analyzes use of USDA's major nutrition programs

One major issue that has delayed passage of a new farm bill in the U.S. House of Representatives is how much of a spending reduction will be made to USDA's food and nutrition assistance programs.

The USDA administers 15 domestic nutrition assistance programs. However, the five largest programs accounted for 96 percent of USDA's expenditures for nutrition assistance during the 2010 fiscal year. Those five programs include the Supplemental Nutrition Assistance Program; Special Supplemental Nutrition Program for Women, Infants and Children; National School Lunch Program; School Breakfast Program; and the Child and Adult Care Food Program.

The largest of the five programs is the Supplemental Nutrition Assistance Program, often called SNAP and formerly known as the Food Stamp Program. According to recent estimates, the program helps feed 46 million people, or 1 out of every 7 Americans.

A recent study by USDA's Economic Research Service investigated the relationship between economic conditions and participation levels across USDA's five largest nutrition assistance programs.

The results of the study suggest that to varying degrees, economic conditions, as measured by the unemployment rate, influence participation in all the major nutrition programs, not just in SNAP.

Another key finding was that the increase in SNAP participation during the 2008-10 period of economic decline was consistent with the increase during previous periods of economic decline, at 2 million to 3 million participants per 1 percentage point increase in the unemployment rate.

In terms of USDA's child nutrition programs, the study found that the percentage receiving free and reduced-price meals appears related to economic conditions, rising with the unemployment rate during periods of economic decline.

However, the study also found that total participation in child nutrition programs has steadily increased during periods of both economic growth and decline.

Further findings of this study can be found at www.ers.usda.gov.

Minnesota hog inventory at record high

According to USDA's National Agricultural Statistics Service, Minnesota hog producers had an inventory of 8.1 million hogs and pigs on Sept. 1, up 3 percent from last year and up 4 percent from June 1. This is also a record high inventory for any quarter in Minnesota's history.

Minnesota's breeding hog inventory totaled 560,000 head, unchanged from a year earlier and unchanged from the June 1 report. Market hogs and pigs, at 7.54 million head, were up 3 percent from a year ago and up 4 percent from June 1.

The U.S. inventory of hogs and pigs totaled 67.47 million head on Sept 1, unchanged from one year ago.

Wes Nelson is executive director of the USDA Farm Service Agency in Kandiyohi County.

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