While ethanol gives consumers another choice at the gasoline pumps, a new study illustrates how the corn-based product also fuels economies.



Ethanol production is having a significant economic impact on Iowa's rural communities, a study by Iowa State University researchers found, according to Dow Jones newswires. ISU economists Paul Gallagher and Dan Otto examined 14 Iowa ethanol plants currently operating plus nine other plants under construction in the state. They project the plants will add $16 million annually in state tax revenues and create more than 5,100 direct and indirect jobs.



"Ethanol used to be thought of as ADM's game (Archer Daniels Midland), or the large conglomerates, but with the plants that are operating today, we are grinding almost the same amount of corn in the dry-mill plants as they are in the wet-mill plants, which are the ADMs and the Cargills," said Daryl Haack, chair of the National Corn Growers Association's ethanol committee.



And with more plants coming on-stream in the near future, the dry mills are expected to grind about 1 1/2 times more corn than the conglomerates, he said. Additionally, "the dry mills are almost all farmer owned...and they are paying out good dividends which are going back to the producers," said Haack.



The study said about half of Iowa's ethanol production in 2005 will come from the farmer-owned plants. At least seven more ethanol plants are either in the developmental or construction phase around the state, Haack noted.



Iowa's ethanol industry is expected to annually spend $910 million on corn, $203.7 million on energy, $161.6 million on ingredients and $82.4 million on wages, the study found.



All of this activity has a ripple effect on the economy, Haack noted. "We knew...that we would need trucking firms to haul in the corn. What we didn't realize is that we would need mechanics and repair shops to keep the trucks running. I just learned a couple months ago that one of the local repair shops saw an explosion in their business because of the ethanol plant," he said, referring to the Little Sioux Corn Processors facility in Marcus, Iowa.



The local banks also have witnessed increased business activity as large amounts of money are being paid to construct new plants, Haack said.



Iowa now ranks as the No. 1 U.S. producer of ethanol at an estimated 1.335 billion gallons per year, the report said.