Ethanol Demand, Prices Boost Farm Communities While much of the country frets about a slowing economy, parts of rural America are experiencing a boom. In the Corn Belt, the growing demand for ethanol and record commodity prices are helping some small agricultural communities flourish.
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Ethanol Demand, Prices Boost Farm Communities

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Ethanol Demand, Prices Boost Farm Communities

Ethanol Demand, Prices Boost Farm Communities

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This is MORNING EDITION from NPR News. I'm Renee Montagne.

And in this part of the program how one boost to America's corn belt is a bust for another part of that economy. The growing demand for ethanol combined with record commodity prices is helping some small farm towns in the northern plains flourish.

Elsewhere though, some cattle producers say that the ethanol boom is driving them out of business. First to that boom, we begin in Iowa where biofuels are breathing new life into once-struggling farm towns. NPR's Jason Beaubien reports from one them: Galva.

JASON BEAUBIEN: Northwest Iowa is corn country. Farms covering tens of thousands of acres roll gently across the undulating landscape. Even now, in winter, cornstalk stubble pokes through the snow.

The price of corn has more than doubled in the last two years, and places like this are benefiting. Part of the reason for the run-up in corn prices is the almost insatiable demand from the region's ethanol plants. At Quad County Corn Processors, dozens of tractor-trailers arrive each day.

The golden kernels spill from the bellies of the trucks into the plant's receiving pits.

Mr. MIKE JERKE (General Manager, Quad Country Corn Processors): We grind about 32,000, 33,000 bushels every day.

BEAUBIEN: Mike Jerke is the general manager of the ethanol plant.

Mr. JERKE: A truck, you know, holds about 900 bushels of corn if it's coming in on a semi. So we're seeing, you know, near 40 trucks a day for corn. And, of course, it's actually more than that because we receive corn Monday through Friday typically. But yet the plant runs 24/7. We're running all the time.

BEAUBIEN: This plant opened in 2002. Each month it converts nearly a million bushels of corn into almost three million gallons of ethanol.

For decades, this was just farm country. Galva has a population of less than 400 people. And it's still predominantly an agricultural community, but Jerke says biofuels are transforming this part of Iowa.

Mr. JERKE: A hundred and two acres of farmland is what we sit on. And now we have the ethanol plant, we have a dry ice facility, they're constructing a biodiesel plant and soybean-crush facility right next door to us. It's really changed agriculture. I mean, it's just one of those quantum shifts in how things happen.

(Soundbite of mooing)

BEAUBIEN: A few miles west of Galva, Brian Friedrichsen runs a 2,400-acre farm with his brother and sons. The Quad County ethanol plant is cooperatively owned by several hundred local farmers, and Friedrichsen is one of them.

Buoyed by mandates for ethanol use and a federal subsidy of about 51 cents a gallon, the Quad County plant has been extremely profitable. Six years after it opened, investors have more than doubled their money.

But Friedrichsen says there are two other key benefits to the plant: it gives him a local market for his corn, and the corn mash residue that's a byproduct of the ethanol process is high in protein and makes an excellent cattle feed.

Mr. BRIAN FRIEDRICHSEN: We're able to utilize the co-products from the ethanol plant, and so we've expanded our cattle operation a little bit every year for the last four years.

BEAUBIEN: He says the feed from the ethanol plant cuts his costs by $40 to $50 per steer each year, saving him at least $200,000 annually. Friedrichsen estimates that the number of cattle being raised in the area has tripled as a direct result of the ethanol facility.

Farmland is also shooting up in value. A nearby farm sold last year for almost $7,000 an acre. Before the ethanol boom, an acre of farmland here would often go for less than $2,000.

About 30 miles northwest of Galva, the town of Marcus is also riding the biofuels boom. It has an ethanol plant, and a biodiesel plant is under construction.

Mr. DARRELL DOWNS (Mayor, Marcus): Now we are in the process of building a motel on the outskirts of our town here. We were able to open up a business park.

BEAUBIEN: Marcus Mayor Darrell Downs adds that a truck stop just opened nearby, and these things are a big deal for a town of 1,100 people.

Mr. DOWNS: I'm a great believer in renewable energy. And I know there's pros and cons on it, but for rural America, it's been a great thing.

BEAUBIEN: Mayor Downs says that as long as Washington mandates the use of biofuels like these, the future is looking bright. And for the first time in decades, he adds, young families are moving back to rural Iowa rather than moving away from it.

Jason Beaubien, NPR News.

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