Study: Ethanol contributes $725M to ND ag retail sector

Source: By: North Dakota Ethanol Council, Prairie Business • Posted: Monday, August 11, 2014

BISMARCK, N.D. – Ethanol production in North Dakota contributed nearly $1.9 billion to the state’s agriculture retail industry in 2013, according to a study recently released by the Center for Agricultural Policy and Trade Studies at North Dakota State University. North Dakota Ethanol Council

The study, commissioned by the North Dakota Farmers Union, shows ethanol production in the state generated roughly $725 million a year in direct income for retail agricultural service and supply dealers in 2013. The indirect impact of ethanol production was $1.16 billion.

 “Ethanol has played a significant role in rural economic development, as this study indicates. For every dollar of ag-related retail sales in 2013, 13 cents was directly linked to ethanol production,” says Jeff Zueger, chairman of the North Dakota Ethanol Council (NDEC). “The plants purchase the majority of their corn from local farmers and sell distillers grains to the state’s livestock producers, who then purchase ag-related services and supplies in their community.”

The four North Dakota ethanol plants produce nearly 400 million gallons of ethanol per year, which is more than a ten-fold increase since 2005. These plants use approximately 140 million bushels of corn annually with more than 80 percent of the corn purchased from North Dakota farmers. Forty to 60 percent of the state’s total annual corn production is purchased by the four ethanol plants.

The study outlined four immediate impacts of ethanol production: increased commodity prices, increased net farm income, increased agricultural inputs and increased land prices. According to the study, ethanol production in the U.S. was about 1.6 billion gallons in 2000. A decade later, America produced 12.7 billion gallons of ethanol, consuming nearly 37 percent of the U.S. corn crop. That increased demand raised corn prices $2 per bushel on average in 2005 to almost $7 in 2012. All other commodities followed corn.

The complete study can be viewed at