As chairman of Dakota Renewable Fuels and as a corn producer I strongly support North Dakota's legislation that gives support to ethanol plants. For years farmers in North Dakota have watched as producers in the neighboring states of Minnesota and South Dakota have benefited from their state's support of ethanol.
In 1986, the Minnesota Legislature provided $3 million per year for 10 years ($30 million total per plant) to 15-million-gallon plants. In 1988, Minnesota's first ethanol plant came on line. Since then, Minnesota's ethanol industry has grown from 1 plant producing 15 million gallons to 14 plants producing 393 million gallons. Of those 393 million gallons, 310 million gallons are produced by plants that are owned by farmers.
South Dakota has seen similar success with 7 plants that produce 208 million gallons of ethanol. When the two plants in South Dakota currently under construction come on line, South Dakota will produce a total of 353 million gallons of ethanol of which 253 million gallons will be from farmer-owned facilities. North Dakota's two existing facilities currently produce about 37 million gallons per year.
North Dakota's corn production has increased 45 percent since 1998 with a 113-million-bushel crop in 2002. About 65 percent of this corn is shipped out of state. An ethanol plant provides tremendous opportunity for capturing the value added potential of corn. For example, the average yield per acre of corn in North Dakota is about 110 bushels per acre. At an average price per bushel of $2, the economic return on an average acre of North Dakota corn is $220. If this corn is shipped out of state, this is the end of economic return to North Dakota. However, if those 110 bushels go to an ethanol plant in North Dakota, about $380 worth of ethanol and $75 worth of animal feed is produced. The economic return on that acre of corn has grown from $220 to $675.
Dakota Renewable Fuels, a group of farmers and local investors, is planning to build a 30-million-gallon plant in the Valley City area that will use 11 million bushels of corn per year. Our goals are to capture the value added potential of North Dakota corn, produce high quality ethanol and animal feed, and provide economic development for North Dakota. Our research shows us that the ethanol industry is growing and that these plants will be built somewhere. We believe that North Dakota producers can and should be part of this industry's growth. We will hold an equity drive this summer. This investment opportunity is open to all North Dakota residents. We hope that all North Dakota residents will take the time to learn about how this opportunity can benefit themselves and their state.
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Dows, Page, N.D., is Chairman of Dakota Renewable Fuels
