With three new plants added in November, annual corn demand for ethanol production in Nebraska passed the 500-million-bushel mark for the first time, using 37% of Nebraska's corn.
Corn prices have remained virtually unchanged since World War II. Increased demand from ethanol production has raised average corn prices by 70% and is driving an economic resurgence in rural Nebraska, according to Todd Sneller, administrator of the Nebraska Ethanol Board.
"Increased demand for the state's largest crop is no accident," says Sneller. "In 1971, the legislature recognized that the huge corn surplus depressed prices and severely limited the value of the state's largest crop. The livestock industry historically purchased a third of annual production, but the rest was exported."
The Nebraska Legislature decided to increase local demand by transforming corn into liquid energy in the form of ethanol. The Nebraska Ethanol Board was created by the Legislature to "cooperate with the private sector and establish a grain ethanol industry in the state."
"Today, that ambitious directive has become a reality." Sneller says "At current rates, Nebraska plants will use 514 million bushels of corn annually to produce 1.4 billion gallons of ethanol. By the end of 2008, Nebraska plants will process 860 million bushels into 2.3 billion gallons of ethanol. Distillers grain, a co-product of ethanol production, is widely accepted and marketed as a superior livestock feed."
National ethanol production will reach 7.5 billion gallons in 2007 and use 2.7 billion bushels of corn and other commodities. The idea that started in Nebraska is now a commercial reality nationwide and the ethanol industry is a significant part of U.S. agricultural and energy policies.
Nebraska ranks 37th among the states in total motor fuel consumption and averaged about 0.5% of U.S. sales over the last few years, according to Steve Sorum of the Nebraska Ethanol Board. Despite being a relatively small fuel market, Nebraskans will spend nearly $3 billion for fuel in 2007. Because 60% of our fuel contains lower-cost ethanol, motorists will save more than $50 million this year alone, Sorum says. "Nebraska ranks third in corn production and second in ethanol production, solidifying the state's role as a net exporter of liquid energy," Sorum says.