FOR IMMEDIATE RELEASE: August 31, 2001 

RESULTS OF STATEWIDE ETHANOL STUDY RELEASED

JEFFERSON CITY – On Friday, August 31, 2001, leaders of the Missouri Corn Growers Association (MCGA) and Missouri Corn Merchandising Council (MCMC) announced the completion of a statewide feasibility study to provide a "blueprint" for the future growth of Missouri’s farmer-owned ethanol industry. Jeff Kapell, Associate Principle with SJH and Company of Boston, presented the results of the firm’s independent study to farmers and public policy makers gathered at the MCGA/MCMC office building. MCGA and MCMC commissioned the study in early June after being awarded grants from the Missouri Department of Agriculture and USDA Rural Development Division to assist in funding the study.

"At least thirty separate farmers and farmer-groups had contacted our office by March 1, all interested in building separate ethanol plants in Missouri.  Thus, we felt it was time to step forward and commission a statewide study to help guide the future growth of the industry. We had no preconceived notions about how many ethanol plants Missouri should have. However, we felt and still feel that farmer-groups need the best information possible to base their decisions upon," says Don Fisher, MCGA President and Corder, MO farmer.

The three-month, in-depth study evaluated ethanol market opportunities within and outside of Missouri, determined how many ethanol plants might reasonably be located within the state, identified approximated locations of these future ethanol production facilities, and evaluated other factors affecting future growth of ethanol production and utilization in Missouri.

Jeff Kapell of SJH and Company summarizes, "Based on careful and in-depth analysis, we know that Missouri can reasonably support approximately 150 million gallons of ethanol production with current market conditions. This number is based primarily on domestic corn supply and corn available at a reasonable price, as well as other numerous market factors. It is possible that federal legislation could mean that Missouri can support up to 250 million gallons of ethanol production in the future. Approximately five, 30 to 50 million gallon facilities could supply this demand and would likely be located in the five major corn growing regions of the state: northwest, northeast, west-central, east-central and southeast Missouri.

"The Missouri ethanol demand is currently approximately 60 million gallons. SJH finds that the ethanol market can be expected to grow in the mid- to long-term to approximately 80 million gallons, considering current market drivers. An accepted rule of thumb in business is that 30 to 50 percent of a facilities’ production should be used in a ‘local’ market. Thus, if Missouri ethanol demand is 80 million gallons, then Missouri production should be approximately 160 to 240 million gallons to meet such demand. Again, the case is built for approximately five, 30 to 50 million gallon ethanol production facilities. Current plants are Golden Triangle Energy at Craig in northwest Missouri and Northeast Missouri Grain at Macon. Finally, SJH also found that the state ethanol incentive fund was critical to the success of such farmer-owned ventures.

"In summary, SJH would recommend that further analysis be conducted by individual groups of farmers to determine how to meet the market demands for 160 to 240 million gallons of ethanol, likely to be produced in five, 30 to 50 million gallon plants," concludes Jeff Kapell, SJH and Company.

Gary Marshall, MCGA/MCMC CEO, comments, "We appreciate the professional work preformed by SJH and Company. As a companion to this work, Co-Bank Business Advisory Services of Denver has completed an ethanol pre-feasibility Internet model for MCGA. Jamey Cline, MCGA/MCMC Director of Value Enhancement, will be working with interested farmers and farmer-groups so they can apply information from the study and test their ideas in the pre-feasibility model."

"This was a wise investment of corn grower membership dues and check-off contributions," says Brent Rockhold, MCMC Chairman. "We’ve provided farmers with solid information upon which to grow a new market, one in which they have and will have an ownership position. Ethanol allows farmers to add value to corn, their commodity. They have ownership in facilities that turn this commodity into products, in this case ethanol, livestock feed and carbon dioxide. We’re happy to be helping to provide such opportunities to our fellow growers."

A companion study will also develop a blueprint for additional farmer-owned, corn processing opportunities in Missouri. The results of this "beyond ethanol" companion study are expected in late fall or early winter, and will give farmer-groups a "menu of options" from which to choose ideas for follow-up feasibility studies for their specific county or region. For more information, contact the MCGA office at (800) 827-4181.

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Editor’s Note: For recorded comments on this subject, please contact the MCGA actuality line toll-free at (800) 827-4181, extension 200.