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More than just farmers profiting from ethanol

Agriculture.com Staff 01/10/2007 @ 4:40pm

CORALVILLE, Iowa--Like those selling shovels and pick axes during the "gold rush", a lot of people are making money off the surge of the ethanol industry, Ron Stutsman, President of Eldon C. Stutsman Inc. said Wednesday.

As a panelist at an economic forecast luncheon here, Stutsman said ethanol is a lasting boon to the agriculture industry and its rural communities.

"Since $1.00 was added to the corn price, that has meant $35 million for Johnson County, Iowa," Stutsman told a group of bankers. "As the ethanol demand raises the corn price, we are in uncharted waters."

The long-time southeastern Iowa farmer/agricultural businessman, said he has seen the corn price go above $3.00 per bushel only five times. This time, ethanol seems to have longer lasting support as a market fundamental, Stutsman said.

Others making money off the surge in ethanol are companies that are involved in processing, and selling by-products of ethanol.

"Just this week, you see that companies operating in Iowa such as Pot Ash, Tara, Monsanto, ADM, and Cargill have all seen their stocks go up," Stutsman said.

As more farmers decide to plant corn in 2007, Stutsman noted the fertilizer business has benefited from ethanol.

Tom Aller, President of Interstate Power and Light Co. in eastern Iowa, agreed ethanol has started a new revenue stream for the agricultural communities.

"Ethanol will probably end up being like fax machines when they came out," Aller said. "It sparks yet other ag-related industries. Ethanol is great, but the products that come from ethanol will be where the job growth is."

On average, an ethanol plant can help create 80 jobs, according to Stutsman.

Meanwhile, because of increasing corn prices, the news isn't all positive for agriculture, Stutsman said.

"First off, keep in mind, not every farmer is getting $3.00-plus corn prices," Stutsman said. "A lot of guys sold early. As a result, we are hearing that pre-paying for spring planting needs is down and so are implement purchases."

In addition, higher corn prices could mean less profitability for pork producers. "I think you'll see food prices go up as well," Stutsman said.

CORALVILLE, Iowa--Like those selling shovels and pick axes during the "gold rush", a lot of people are making money off the surge of the ethanol industry, Ron Stutsman, President of Eldon C. Stutsman Inc. said Wednesday.

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