The Next Ethanol

Feb 20, 2012

By Bernie Hunhoff

News came last week that the 2011 corn crop in South Dakota was worth about $4 billion. That's not chump change. The state's total GDP is only about $40 billion.

The $4 billion represents a 33% increase over the prior year, and farmers weren't complaining in 2010.

There's plenty of credit to go around. Mother Nature gets most of it, but our farmers' ability to adapt to new seeds, technologies and tillage practices are also impressive.

Then there's ethanol. Remember the time when cattle and hogs ate most of the corn crop? Those were the days when corn too often sold for less than $2 a bushel. Now, much of the crop is delivered to ethanol plants; after the starches are removed, the by-product is sold as livestock feed.

Environmentalists, old-oil advocates, corn farmers and others can argue till doomsday about the efficiencies of ethanol, but there's no doubting that it has been liquid gold for South Dakota.

Industry experts always said ethanol would be a bridge to a better bio-fuel, and the second generation is about to arrive in Redfield where a farmer-owned ethanol plant is being retroffitted for a new product called bio-butanol.

The plant manager came to Pierre last week, pitching a bill that will expand the state's ethanol incentives to include bio-butanol. He said it has a four-molecule composition that gives it a much broader commercial use in product manufacturing and foods. It can also be blended with diesel and aviation fuels, and the by-product has a longer shelf life as livestock feed.

It will be interesting to hear what Exxon Mobil has to say.