The high gas prices of late have many people grumbling and the talk eventually gets around to alternative energy sources. Add in the environmental concerns and you get more people talking about alternatives.
The high prices also have many focused on Iowa's ethanol industry, a high octane fuel produced when plant sugars are fermented. In the United States, ethanol is typically produced from corn and other grain products, and Iowa has embraced fuel that contains ethanol. In February, 2004, more than 60 percent of all gasoline sold in Iowa contained ethanol.
According to a recent study by Iowa State University economics professors, the state's total production capacity for ethanol soon will reach 975 million gallons per year. Annual product sales from the industry will be worth $1.79 billion.
Currently, Iowa's ethanol industry, including the local Little Sioux Corn Processors, L.P. plant east of Marcus, has the capacity to produce 663 million gallons annually. Three privately owned wet mills account for 445 million gallons of that capacity, while nine farmer-owned or cooperative dry mills, all constructed since 1996, can provide 300 million gallons each year.
In addition, five more farmer-owned or cooperative dry mills are under construction and scheduled to begin operation in the next year, plus one plant is in the planning stages. These plants will mean another 230 million gallons of ethanol each year.
Iowa's existing ethanol industry generates $363.3 million in economic activity to local communities. When all the plants are up and running, the industry will have a $481 million impact.
The existing plants have created 3,390 direct and indirect jobs. The proposed plants will add about 830 jobs to that total.
Currently, the ethanol industry buys 275 million bushels of corn from Iowa producers each year, and that will rise to 361 million bushels with the new plants.
Also, Corn prices near plant sites average about 12 cents per bushel more than prices outside the plant's market area.
So, come on Iowa! Give a cheer for ethanol and the economic impact it brings.