Corn Kernels Nebraska’s Economic Powerhouse
March 14, 2013 by lmorgan
As Tim Scheer navigates his combine through cornfields near St. Paul, Neb., every fall, the millions of corn kernels piling into waiting semis are really little economic powerhouses upon which Nebraska thrives.
“Those kernels are pretty small on their own, but together they snowball into quite an economic driver,” Scheer said. “Livestock production, ethanol, bioplastics and other industries all utilize corn or products made from corn.”
Once corn leaves the field, everywhere it’s used adds value. For example, an ethanol plant takes that corn and makes ethanol and distillers grains, a livestock feed. Fuel blenders add that ethanol to gasoline, while livestock producers feed distillers grains and turn it into beef, pork, poultry and dairy products.
“Corn is not only a predominant crop but a predominant enterprise. It ripples through the economy a long way. The carry through of corn to processing and feed is just phenomenal,” said Dr. Bruce Johnson, an economist with the University of Nebraska.
In an analysis, Johnson and his colleagues estimated that corn production and its ripple just through the ethanol industry has a value-added impact of $6.6 billion on Nebraska’s gross state product (GSP is comparable to the gross domestic product on a national level). That figure is just the portion attributable to corn and ethanol – livestock and poultry each have their own sizable impact, as well, and rely heavily on corn and distillers grains as an input.
That figure also doesn’t include all the products changing hands just to grow a crop. For example, in 2012 Nebraska farmers invested about $2.8 billion, roughly $270 per acre, to get the crop planted includes only seed, fertilizer and other inputs necessary to get the crop off to a good start. That’s dollars that go to cooperatives, seed dealers and others who sell those inputs and employ thousands of Nebraskans, converting that $2.8 billion investment into a $7.0 billion ripple through the state’s economy.
Shannon Landauer, executive director of the Boone County Development Agency, said corn, ethanol and livestock are all important to rural communities, as they create employment opportunities and support local businesses.
“Between late 2006 and the third quarter of 2011 we saw 170 new jobs and more than $400 million invested in Boone County,” she said. “Having such a strong ag economy allowed us to weather the economic downturn pretty well. In fact, our unemployment rate is below 3 percent locally. Corn, livestock and ethanol all come together well for us.”
Landauer added that several recent grain storage projects alone were valued at more than $1 million. “Those projects mean income for the community, in terms of construction costs and workers spending money here. It makes a significant difference for smaller communities,” she said.
The analysis by Johnson and his colleagues pegged direct and indirect jobs for corn production at 63,900 across the state, plus an additional 10,900 jobs for ethanol. The labor and proprietor income generated from these jobs comes to nearly $5.3 billion – and that’s not even counting the role of corn working through the livestock sector.
“Those are big numbers, important numbers for Nebraska,” said Scheer. “The investment corn farmers make every spring is the foundation for the state’s economy, thousands of jobs and a lot more. It’s pretty incredible when you think about it.”