Locally Owned

Mar 1, 2007 12:00 PM

FARMER-owned ethanol plants are becoming a rarity. “To use the word ‘farmer-owned’ is just gone,” reports David Swenson, Iowa State University economics department. “We use ‘local ownership’ now. We talk about people in the region who are invested in the plants.”

He cited the case of a new ethanol plant in Story County, IA, where the owners' zip codes are from nearby urban areas like West Des Moines, IA. The plant isn't farmer owned, but locally owned. Swenson says he's heard estimates that about half of the ethanol plants are now locally owned.

The benefits of local ownership are high, according to economic research that Swenson conducted. A 50-million-gallon-per-year ethanol plant produced with no local ownership created 135 jobs in a community. “For each 25% of local ownership, you add 29 more jobs to the local economy,” he says. A plant 100% locally owned will generate 120 more jobs in the community.

However, the ethanol plants themselves do not create a large number of new jobs, Swenson says. Some 32 to 33 million bushels of corn are needed to operate a 100-million-gallon-per-year ethanol plant, which runs with 45 employees. “If you take the same amount of corn, it would feed enough hogs that will require 800 jobs to take care of,” he says.