The Nebraska ethanol and co-products industry continues to play a vital role in the state’s economy, contributing billions of dollars annually, according to a new study from the University of Nebraska–Lincoln, reports Ethanol Producer Magazine.
The study, conducted by the university’s Department of Agricultural Economics and Bureau of Business Research in collaboration with the Nebraska Ethanol Board, examines the industry’s economic impact from 2021 to 2023. The findings highlight the industry’s steady performance compared to the overall state economy, other agricultural sectors, and non-agricultural industries. The ethanol sector directly supported 1,800 jobs across Nebraska, with an average annual salary of approximately $80,000 during the study period.
Despite broader economic fluctuations, ethanol production in Nebraska has remained stable. Production volumes were recorded at 2.036 billion gallons in 2021, 2.018 billion gallons in 2022, and 2.008 billion gallons in 2023. When factoring in the value of co-products, the total industry output reached $5.699 billion in 2021, $6.932 billion in 2022, and $6.031 billion in 2023.
The ethanol sector remains Nebraska’s third-largest agricultural industry, following corn and cattle, and significantly surpasses soybean production. Between 2021 and 2023, ethanol production equaled 68% of the value of corn, 50% of cattle, and 169% of soybeans.
Co-products from ethanol production played a key role in stabilizing the industry during periods of lower ethanol prices. In addition to strong demand for distillers grains, other co-products—such as corn oil, corn syrup, and hand sanitizer—accounted for 45% of ethanol’s total value in both 2022 and 2023.
“For every dollar of ethanol produced or sold, 45 cents of co-products were produced and sold,” said Eric Thompson, Karl H. Nelson Professor and chair of economics and director of the Bureau of Business Research, who co-authored the report. “The evidence shows that the ethanol industry is an important part of Nebraska’s value-added agriculture sector.”
A new component of this year’s study compares the ethanol industry’s impact to Nebraska’s broader economy. In 2022, the industry’s economic contribution was estimated at $8.18 billion, compared to Nebraska’s total gross domestic product (GDP) of $167.5 billion. To put this in perspective, the report contrasts the ethanol industry’s impact with the College World Series, which generated an economic impact of $88 million in 2019 and is projected to reach $115 million in 2024. The ethanol industry’s impact is more than 50 times greater than the College World Series’ 2024 total.
Ethanol and co-product production directly supported 1,800 full-time jobs between 2021 and 2023, averaging 75 jobs per plant. The number of direct jobs created per plant ranged from a minimum of 27 to a maximum of 430. Half of the ethanol plants included in the study are located in towns with fewer than 1,900 residents.
Using an economic modeling technique to assess indirect economic activity, the study estimates that the ethanol industry was responsible for an additional 7,162 jobs and contributed $1.255 billion to Nebraska’s economy in 2022.
Tim Meyer, associate professor of practice in the Department of Agricultural Economics and a co-author of the study, emphasized the industry’s resilience and long-term economic significance.
“Given the industry’s ability to rebound after a period of low ethanol prices and the production complications during COVID-19, we believe ethanol will continue to be a major economic driver for years to come,” Meyer said. “It provides stable employment and generates billions of dollars for small communities and the state as a whole.”
The full report is available on the Department of Agricultural Economics website.
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