Investment in ethanol is paying off

Freshman economics and incentives to create a new market are resulting in a happy situation for farmers who are seeing high prices right when the harvest is coming in.

They need some good news; high prices for their commodities are needed to offset the cost of fuel, fertilizer and other inputs.

Corn farmers are expected to harvest 10.9 billion bushels this year, which would seem like a huge amount of grain, except it's about 2 percent lower than expected.

And, the nation is expected to consume nearly 12 billion bushels of corn this year, not including corn that will be shipped overseas.

The economics lesson came Thursday, when the higher demand, coupled with lower supply, translated into a 15-cent increase in price -- $2.99 a bushel, up 60 cents in the past month.

The hot, dry summer can be blamed for the lower supply, but as for the demand, you have to look no farther than the car in your driveway.

That's because it can burn at least 10 percent ethanol -- possibly as much as 85 percent, if it's flex fuel -- and that comes from corn.

Southwest Nebraska residents are well aware of the ethanol industry, built with the encouragement of state incentives. A Trenton plant is in full production, another is planned west of McCook and others at Cambridge and Madrid.

Statewide, a dozen ethanol plants already are pumping out more than 575 million gallons of ethanol a year and consuming more than 400 million bushels of grain in the process.

Through state incentives, $1.4 billion has been invested in Nebraska ethanol plants, which employ 1,000 people directly and many more in support roles.

Nebraska already has an advantage as an ethanol producing state, thanks to its supply of grain, geographic location and rail transportation advantages, making it the largest producer west of the Missouri River, and third largest in the nation.

That rank could climb, with 10 more plants under construction, and three dozen more being considered.

Truly those state ethanol incentives have paid off in more jobs and higher commodity prices. But we shouldn't rest on our laurels. We should press forward with other promising energy sources for the future, such as cellulosic ethanol, biodiesel -- even hydrogen and wind.

As the current ethanol situation proves, the right investment today can pay off big in the future.