Ethanol plant boasts business for SD

Source: By AG Week • Posted: Monday, August 17, 2015

A report released Thursday by South Dakota-based ethanol producer Poet says the company generated more than $13.5 billion in sales for U.S. businesses and supported nearly 40,000 jobs through its refinery of ethanol.

In South Dakota, that includes $500 million worth of corn purchased last year and supporting more than 4,500 full-time jobs, along with $38 million in taxes on the state and local level.

Poet held an Ethanol Day celebration on Thursday as a way to tout its role in the South Dakota economy at its biorefining plant north of Mitchell. The event included a free lunch for farmers, investors and dignitaries, tours of the ethanol plant to show the process and a flyover from the Vanguard Squadron, a group of planes that are powered solely by ethanol.

Poet itself employed 1,594 people nationwide — including 43 people at its Loomis location north of Mitchell — and Poet Mitchell General Manager Becky Pitz said it shows the trickle-down effect of the business both inside the plant and outside in the community.

“It’s a great sign of what we do here,” she said. “Those are American jobs and business that can’t be shipped overseas.”

Nationally, Poet produces 1.7 billion gallons of ethanol fuel each year–or 11 percent of the nation’s ethanol — and spent $3.1 billion on raw materials, or mostly corn, to produce ethanol in 2014. The company said its efforts account for more than $5 billion in national gross domestic product and contributes more than $464 million in state and local taxes in each year.

Mitchell Mayor Jerry Toomey said $1.7 million in property taxes are collected each year from the local plant, with $1.2 million going to the Mitchell School District.

“The impact that this has had on the city of Mitchell has been tremendous,” he said, also crediting Poet’s involvement in the community.

At its plant north of Mitchell, Poet bought 25 million bushels of corn from farmers in 2014 and produced 72 million gallons of ethanol. The plant was constructed in 2006.

Pitz said the figures are affirmation for the quality of the work done at their plant and that workers at Poet Mitchell are prideful of their work.

“We’re always striving for excellence,” she said. “It makes us very prideful and it does make an impact on the Mitchell economy.”

The study was done by Agriculture and Biofuels Consulting, LLP, of Doylestown, Penn., and was commissioned by Poet. Also researched was the indirect and induced effects of Poet’s business, such as spending on goods and services related to doing business with the ethanol plant. The report said that Poet supports more than 9,950 jobs in that manner and contributes an additional $1 billion to the GDP produced by Poet.

State Rep. Joshua Klumb, R-Mount Vernon, said the competition that Poet provides to the area is welcome for farmers when they have options of where to bring their corn. He said farmers frequently have to balance the costs of bringing their corn to the local elevator or Poet.

“You have to do the calculations and see if the drive is worth it,” he said, adding that from his experience, if Poet has a 10-cent advantage per bushel, that can make it worth the trip.

Personally, he said he enjoys hauling to Poet Mitchell because of the ability to get around the complex easy and that the whole area is paved, rather than having deal with dust.

“I think it smells good,” he said with a laugh. “I think it smells like cookies.”

He also pointed out the benefit of the DDGS, or the distiller’s dried grains that are the nutrient-rich co-product of ethanol production that can be fed back to cattle.

“Corn is cheap and cattle are expensive,” Klumb said. “Let’s combine the two and take advantage of that.”

Poet has six South Dakota locations — ethanol plants in Big Stone, Chancellor, Groton, Hudson, Mitchell and Scotland, which was the original plant for the company in 1988 and where Poet now conducts its research and development. The company’s study says the South Dakota plants produced 377 million gallons of ethanol and used 135 million bushels of corn.

As a legislator, Klumb said the state must continue to do “whatever it takes” to help facilitate growth in value-added agriculture. He said the state’s efforts to help find sites in counties and scout out potential business locations has been helpful.

“You’re turning a product that’s not worth very much and making it more valuable,” he said. “The more opportunities we have for that, the better.”