Date of this Version
Harthoorn, A. (2022). “What is the Value of Ethanol to Nebraska Corn Producers?” M.S. Thesis. University of Nebraska–Lincoln.
In this thesis, we examine the role of local ethanol plants on net price received by Nebraskan corn growers, with net price comprised of the grain buyer’s bid onsite less the transportation cost incurred through delivery. As each farm operation is uniquely located between different sets of grain buyers, an ethanol plant impacts each grower’s net price to a different degree, depending on location. Exploring this, we use grain bid and transportation cost data based on actual ethanol plants, grain elevators, and sample farm locations in Nebraska, estimating the diversely located corn grower’s net prices received from surrounding grain buyers. We find higher net prices available at ethanol plants for a large majority of farm locations considered in this study. This not only indicates that ethanol plants generally offer higher prices than grain elevators; it also suggests the offered price sufficiently compensates for transportation costs and incentivizes corn growers to travel more miles to deliver to an ethanol plant. We observe some cases where corn growers bypass their local elevator and still attain a higher net price at the ethanol plant, while farm locations in closer proximity to the plant achieved as much as $0.54 per bushel more delivering to the ethanol plant over nearby grain elevators. In addition to varying across location, ethanol’s impact is also found to differ by ethanol plant size and fluctuate by season. Our findings suggest ethanol plants with larger capacities provide greater value over a wider scope. In addition, the net price differential between ethanol plant and grain elevators is found to be the greatest in Spring.
Advisors: Cory Walters, Kathleen Brooks