Branstad was joined by Eamonn Bryne, Plymouth Energy chief executive officer, and Plymouth Energy board members in a tour of the plant.
The importance of renewable fuels such as the ethanol was the focus of the governor's comments to news reporters after the plant tour near the town of 755 people.
"Merrill's a small town, but they've been able to hire people here locally, they've provided a market for corn and, obviously, they've also provided a source of feed for cattle and pigs locally," he said.
Dried and wet distillers grains are co-products of ethanol production fed to cattle and hogs.
Branstad acknowledged it's not possible to meet all of the nation's fuel needs with renewables, but spoke of the importance of reducing a dependence on foreign oil for fuel.
"I believe we should have a national policy that says within five or six years, we don't want to be importing any oil -- we want to purchase domestically from North Dakota, Texas and Kansas and we want to use renewable fuels," Branstad said.
He said that policy could make a difference in the nation's future.
"We won't be dependent on the Middle East or Venezuela or countries that are not our friends," Branstad said.
He said he's using his role as chairman of the Midwest Governor's Association for 2012 to promote renewable fuels.
"I just recently signed a letter, along with Gov. (Pat) Quinn from Illinois and Gov. (Sam) Brownback from Kansas, telling what we've done to promote E15 and blender pumps in our states and encouraging the other governors in the Midwest to do similarly," Branstad said.
Keeping the ethanol industry profitable is a concern the Iowa governor voiced to reporters.
"We just saw a plant in Nebraska close so we want to do all we can to help with the profitability of it and one of the big things is to have a reliable consumer demand for ethanol," Branstad said,
Retaining the federal Renewable Fuels Standard (RFS), which established the nation's first renewable fuel mandate, is a key to the profitability of ethanol plants, the governor said.
Federal law currently requires the amount of renewable fuel to be blended into transportation fuel to increase from from 9 billion gallons in 2008 to 36 billion gallons by 2022, according to the Environmental Protection Agency website.
Branstad said he wants to do all he can to encourage the growth of the ethanol industry and to maintain the RFS at the federal level.
"That's the way we can continue to reduce our dependency on foreign oil and replace it with renewables," he said.