S.D. Ethanol Industry Impact Tops $3.8 billion

Plants bought 350,000 bushels of corn in 2012 and employed 1,900 people.

Published on: Jul 15, 2013

The ethanol industry added $3.8 billion to South Dakota economy in 2012, according to the study commissioned by the South Dakota Ethanol Producers Association.

That's up $2 billion since 2004

The figure includes the direct value of the product produced, the indirect effect as a result of purchases by the industry and the increase in household spending resulting from the increased economic activity in the state.

"As an industry, the most visible impact is the billion gallons of ethanol production, and more than 350 million bushels of corn purchases," says Dana Siefkes, SDEPA president and chief administrative officer of Redfield Energy, Redfield, S.D. "But it's so much more than corn and ethanol. The plants drive the local economies because they buy locally. They purchase things like vehicles, fuel, paper towels, office supplies and everything else a large employer needs to operate.  Each local ethanol plant employs a top-notch workforce; while churning out more than three million tons of dried distillers grains for livestock feed. This study quantifies both the growth of the industry since 2004; and the significant and wide-reaching positive impact on South Dakota's ag-based economy."

Ethanol plants are having a significant impact on South Dakotas economy according to a new study.
Ethanol plants are having a significant impact on South Dakota's economy according to a new study.

According to the study, the South Dakota ethanol industry has grown more than 441% in sales of ethanol and dried distillers grains since 2004, estimated to be in excess of $2.983 billion; with South Dakota producing about 7% of the nation's ethanol supply. The corn basis and land values have also increased. Indirect business tax revenue in 2012 was more than $18.5 million, while the industry contributed about $200 million in direct value-added to the state economy.

"The ethanol industry has been a great investment for the people of South Dakota," says Commissioner Pat Costello with the Governor's Office of Economic Development. "The industry has grown significantly in the last decade and continues to pay dividends for tax payers, our agriculture industry, our high-quality workforce and our rural communities."

S.D. Ethanol Industry Impact Tops $3.8 billion
S.D. Ethanol Industry Impact Tops $3.8 billion

In 2012 the industry employed 1900 people with an average annual salary of about $60,000; an increase from 473 employees in 2004; with an additional 7,654 jobs in 2012 as a result of the impacts of the ethanol industry.  

"Our employees buy houses, groceries and insurance," added Siefkes-Lewis. "And let's not forget, many of our employees have returned to South Dakota to raise their family with ethanol-related career opportunities. They are involved in the communities; contributing by volunteering or taking on leadership positions. These are impacts that cannot be quantified, but are just as significant."

The study was conducted by Gary Taylor, associate professor of economics and Lisa Elliot, assistant professor of economics both at South Dakota State University.

SDEPA was formed in 1992 to represent the ethanol industry in South Dakota. The non-profit, trade group represents 15 plants with more than one billion gallons of ethanol production capacity and 3.2 million tons of distillers grains livestock feed production. The association's mission is to foster the development and growth of the ethanol industry in South Dakota through legislation, education, promotion and infrastructure development.

Source: SDEPA