Recent reports indicate a strong future for ethanol production in 2017. With added capacity and a diversified platform, ethanol is a bright spot in a bleak agriculture forecast.
An impact study by University of Nebraska-Lincoln economists in 2015 revealed Nebraska’s ethanol production capacity growth between 1995 and 2014 was tenfold with a $5 billion annual economic impact. Just a few years later, that growth continues.
With an operating capacity of approximately 2.2 billion gallons of ethanol, Nebraska ethanol producers used 31 percent of the state’s corn crop in 2016. This operating capacity is an increase of five percent compared to 2015. Production is expected to rise in 2017 with a projected record year for ethanol.
“In a challenging time of agriculture finances, the ethanol sector continues to be a strong market for corn growers,” said Todd Sneller, Nebraska Ethanol Board administrator. “This increase in Nebraska ethanol production shows that more corn is being purchased locally and turned into not only ethanol, but a number of valuable co-products.”
In 2016, Nebraska’s ethanol industry produced more than 7.2 million tons of distillers feeds and 268,000 tons of corn oil. Additional co-products include corn syrup, dry starch and specialty livestock feeds.
“We see what economists describe as an economic ‘bounce’ when we take advantage of the added value as grain is converted to food, fuel, fiber and bio-products,” Sneller said. “There is enormous potential for biofuels to continue to strengthen the economic health of Nebraska.”
In addition to purchasing more corn, several ethanol producers have invested in new technology to increase capacity and product diversification. Sneller noted approximately $150 million in new investments to local ethanol plants like Siouxland Ethanol in Jackson, Flints Hills Resources in Fairmont, E-Energy in Adams, and Archer Daniels Midland (ADM) in Columbus.
“Plants in Lexington and Ravenna that were recently bought by Nebraska companies are running at capacity and investing in expanded capacity,” Sneller said. “These expansions and new co-products mean additional jobs and income in Nebraska.”
As the second largest producer in the United States, Nebraska’s ethanol production makes a global impact. According to the U.S. Energy Information Administration (EIA), the United States exported more than 1 billion gallons of ethanol in 2016, an increase of 26 percent compared to 2015. EIA estimates net exports of ethanol to rise another six percent in 2017.
“We continue to see huge demand for ethanol in Asian and South American markets,” Sneller said. “The robust ethanol export trade means we expect another record-level year in ethanol production.”