A recent study conducted by researchers at Iowa State University (ISU) highlights the ethanol industry's enormous impact on the economy.

While the study focuses solely on Iowa's ethanol industry, a leader from the National Corn Growers Association (NCGA) says the findings provide insight into the significant economic impact ethanol has on rural communities across the nation.

The study by ISU economists Paul Gallagher and Dan Otto examines the economic effect of the 14 operational ethanol plants in Iowa, as well as the nine plants under construction in the state. The report concludes Iowa's ethanol plants are projected to add a staggering $3.9 billion to the state's economy. Ethanol is having a similar effect on the economies of states throughout the Corn Belt, says Daryl Haack, chair of NCGA's Ethanol Committee.

“We're getting to the point where the amount of corn ground by farmer-owned ethanol plants is about equal to the amount processed by the big wet-mill plants,” he says. “And when those farmer-owned plants pay dividends to their investors, those farmers turn around and spend that money in the local area.”

According to the study, the Iowa plants are expected to generate $16 million annually in state tax revenues and create more than 5,100 direct and indirect jobs. On an annual basis, Iowa ethanol producers are projected to spend about $910 million on corn, $161.1 million for other inputs, $203.7 million on energy and $82.4 million on wages.

According to the Renewable Fuels Association, 81 ethanol plants nationwide have the capacity to produce nearly 3.6 billion gallons annually. There are 16 ethanol plants under construction and two major expansions under way, constituting a combined annual capacity of more than 750 million gallons.