National Economic Impact of Ethanol Study Released

posted by Decision Innovation Solutions on Thursday, March 3, 2011

Recently, John Urbanchuk of Cardno Entrix released his annual assessment of the impact of the ethanol industry.  In the past Mr. Urbanchuk has done similar work for the state of Iowa where he has come up with similar results.

We at Decision Innovation Solutions agree that the ethanol industry, both in Iowa and the U.S. as a whole, has been an economic driver which has created jobs, increased income and displaced foreign sources of energy.  While we agree with Mr. Urbanchuk on the fact that the ethanol industry continues to be a source of economic activity in Iowa and beyond, we do not agree with the magnitude with which he has reported some of his results. 

Perhaps the biggest disagreement we have with his report is the number of agriculture jobs he estimates are associated with the production of ethanol.  All told, the results from this study show that there are over 63,000 jobs in the agricultural sectors that can be tied to the production of ethanol. 

To quote a sentence from his report (page 8), "Most of the agriculture jobs supported by the ethanol industry are farm workers and laborers associated with grain production."  This, in essence, is the crux of the fundamental disagreement we have with the methodology used.  Long before the ethanol industry started quickly expanding, grain farmers were already growing corn and other crops for other end uses.  The only difference now is that ethanol provides an additional market for grain farmers in which to sell their corn. 

To get a more accurate count of the jobs which are tied to the production of ethanol, a person should exclude those jobs which already existed and would be likely to continue to exist in absence of the industry being analyzed.

  1. economic impact
  2. ethanol

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