Ethanol plant integral part of agribusiness landscape in WI
For years Rep. Michael Shraa has driven past the Fox River Valley Ethanol plant just west of Oshkosh. Like most folks, Shraa hadn't a true understanding of the facility that produces over 56 million gallons of ethanol a year.
"I don't think the public realizes just how much economic benefit comes from a production facility like this. I've driven by at least 100 times and have never been inside," Schraa said. "Just seeing all of the trucks owned by farmers and area trucking companies coming in and out of here all day long, there's really so much economic activity beyond selling ethanol."
Shraa was among more than two dozen legislators, state officials, business representatives and media that toured the mammoth facility on Highway 91 as a means to discover the integral part it plays in the economic fabric of northeast Wisconsin and beyond.
The Sept. 22 tour was one of two sponsored by the Wisconsin Agri-Business Association (WABA) this fall. WABA is an umbrella organization that is associated with 310 member companies across the state ranging from ethanol plants, feed mills, fertilizer and chemical dealers to farm stores, equipment dealers and grain elevators.
"We know that most people understand the farm side but agriculture is a $88 billion per year industry," said WABA Executive Director Tom Bressner. "Our purpose is to help you understand this network that works with farmers to make agriculture work so well here in the state. And today our goal is to help you understand the agribusiness side and the impact that this industry has in helping the economy."
Neal Kemmet, president and general manager for Fox River Valley Ethanol said Wisconsin has always had a strong tradition of both agriculture and business.
"Ethanol stands at the intersection of these two strengths, providing the economic and environmental benefits at the local, state and national level," Kemmet said. "There are so many thriving agri-businesses across the state and its an honor to discuss one that's surrounding you here today."
Renewable fuels impact
At a national level, the economic output generated by the renewable fuel sector is about $184 billion a year, Kemmet said.
"This sector which includes conventional ethanol or corn-based ethanol as well as cellulose ethanol and biodiesel provides some 85,000-plus direct jobs and over 300,000 indirect jobs," Kemmet said.
In Wisconsin alone, Kemmet says the renewable fuels industry pays over $130 million in direct wages and $305 million in tax revenue. In total, there are 6,400 direct jobs (across the state's nine ethanol plants) supported by the biofuel industry.
"When it comes to ethanol there's a lot of things to talk about and this visit is one of the best ways to see visible proof," Kemmet said. "Our people are employees who make a real living wage with many health, wellness and retirement benefits. You will also see bins and flat storage facilities filled with corn harvested off of local fields, brought in by local trucking companies - it's also about family farms and cooperatives owned by local farmers."
Truck traffic at the plant is brisk with about 100 trucks entering and leaving the facility on any given day.
"We do business to the tune of about $70 million per year at this facility alone in corn payables to approximately 650 local farmers," Kemmet said.
While the facility mills and processes approximately 56,000 bushels of corn each day - one-third of it devoted to producing ethanol - co-products that support other area business are produced as well.
"Each year we make about 60,000 tons of beverage grade liquid carbon dioxide that's sold to companies like Miller, CocaCola and local paper mills," Kemmet said. "We also make about 1.5 million gallons per year of distillers corn oil that is sold as animal feed and for production of biodiesel. In addition to that, we make about 200,000 tons a year of wet and dry feed that is sold to local dairies."
Built in 2002, the plant was initially designed with a 20 million gallon capacity. In two years the plant doubled its capacity thanks to operational improvements and efficiencies. Through a series of minor capital improvements that facility is up to a 56 million capacity, Kemmet said.
"The total investment in this facility was $70 million with a good percentage of that staying right here in Wisconsin," Kemmet said. "Just this year alone Fox River Valley Ethanol will be spending $6 million in capital improvements with the vast majority of those payments going to Wisconsin-based companies."
The truth about ethanol
Kemmet said ethanol also plays a key role in helping the U.S. in becoming energy independent.
"New fuel efficiency standards set forth by the EPA will require auto manufacturers to produce the next generation of automobile engines that are more efficient, achieving nearly 45 mpg. The best way to achieve those standards is by raising the octane level in our existing fuels," Kemmet said. "And without question, the cleanest and most affordable and highest octane fuel is ethanol. And while Big Oil will do everything in their power to limit ethanol's access to the marketplace, we need to strive to give consumers the choice they deserve."
Bressner said there are many myths surrounding the ethanol industry including government subsidies and food vs. fuel. Federal subsidies officially ended in 2011.
"Government subsidies to ethanol plants today is zero. Initially there was some subsidies to help them get started but that's gone away," Bressner said. "As far as food vs. fuel, one-third (of the corn) that comes in here goes back to animals as food, one-third into fuel and the rest CO2 and distillers so its not one versus the other."
Rep. Gordon Hintz, D-Oshkosh said he was struck by the efficiency of the process.
"Everyone tends to think of corn as just being used for fuel but every single byproduct in this process has value. They really maximize everything. Everything is ag-based and has residual effects throughout the state," Hintz said. "There's only 46 people who work here but the employment ripple effect from this place is much bigger - from the corn growers to the transportation."
Despite the fact that subsidies have dried up, Schraa said the facility has used state manufacturing and tax credits wisely by becoming more efficient and profitable.
"I don't think the general public realizes the benefits of having an industry like this in the community," he said. "I'm happy there's one in my district and that it's doing very well."