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Cash crop: Ethanol plant boosts several aspects of local economy

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Stacy Vogel
December 16, 2007
— Milton’s new ethanol plant has been a boon to James Churchill’s Janesville business.

The owner of James Churchill and Sons Trucking recently added a third truck to handle all the business he gets hauling wet distilled grain from the plant—about 15 loads a week, he said.


“I just think it’s a good company for the area,” Churchill said. “It’s brought jobs to the area with other trucking companies, plus feed for the farmers here.”


The $60 million United Ethanol plant promised several economic advantages to the area when it began operations in Milton’s East Side Industrial Park in March:


-- 30 new jobs


-- A new market for local corn farmers


-- A source of distilled grain for local livestock farmers


-- $15 million in property value in the industrial park


While some of the economic benefits of the plant already are obvious, it’s too soon to tell whether others will materialize, local officials and business people said.


“It’s almost too early to tell as far as its impact on the economy,” said Todd Schmidt, Milton city administrator.


The plant has lived up to its promises, said Joe Johansen, vice president of ethanol operations at United Ethanol. It employs 34 people, most of them hired locally, he said. The plant now runs at full capacity, producing ethanol at a rate of 42 million gallons a year from 15 million bushels of corn.


About 41,000 bushels of corn—41 semitrailers’ worth—are ground daily at the plant. Most of the corn is purchased from Wisconsin farmers, Johansen said.


“I wouldn’t have any problems saying it’s local corn,” he said.


Effect on corn farmers

But the plant hasn’t had much effect yet on area corn farmers or grain elevators, said Tim Buchheit, general manager of Farm City Elevator. The company has four locations, including one in Milton, and has done some business with United Ethanol’s parent company, United Cooperative.


“At this point, I would say that it hasn’t had a big effect on (the corn industry) yet,” Buchheit said. “That’s still yet to be seen.”


Ethanol as a whole in Wisconsin has affected local corn prices, said Jim Stute, crops and soils agent at the UW Extension in Rock County. Between 20 percent and 25 percent of Wisconsin corn goes to make ethanol, he said.


Corn prices started rising last fall in anticipation of new plants opening, Stute said. They’ve continued to increase this fall after a dip in early summer, even though prices traditionally decrease at harvest time, Stute said.


Experts can tell local demand for corn is high because local prices are almost as high as the prices set by the Chicago Board of Trade, he said. He attributed at least part of that high demand to ethanol.


“It contributes, but how much, that’s anyone’s guess,” he said.


Effect on livestock farmers

On the other hand, there’s no question livestock farmers have benefited from the plant, said Keith O’Leary, a dairy farmer in Rock Township.


O’Leary buys wet distilled grain for his animals from United Ethanol because it’s quite a bit cheaper than what he was paying before, he said. He also saves on shipping costs because the Milton plant is much closer than the ethanol plant in Fond du Lac where he used to buy feed.


Now, he pays about $30 a ton for product and shipping, instead of the $55-$60 a ton he paid before.


“It’s definitely benefiting the farmers on both ends by being able to sell your product … and on my end where I feed livestock out, it helps on my end being cheaper,” he said.


Effect on Milton businesses

The plant has benefited Milton businesses in smaller ways, too, said Dori Lichty, a spokeswoman for United Cooperative. Employees buy food from the Milton Piggly Wiggly for board meetings and take investors, clients and officials out to Milton restaurants “just about every day,” she said.


“They’re constantly running to Dave’s Ace Hardware for supplies,” she added.


The plant isn’t the hardware store’s biggest corporate account, but it is within the top 40, said owner Dave Warren.


The plant made five transactions in October and four in September, he said.


“They’re good customers; they pay their bills on time,” he said.


Meanwhile, taxes from the plant will help keep property taxes down for residents once the plant pays back an $811,000 tax incremental financing loan from the city, Schmidt said.


The plant might have even more property to tax soon, Johansen said. United Ethanol plans to build a carbon dioxide processing plant this winter that will capture the gas released during the fermentation process. And the ethanol plant was built with room to expand to double its ethanol-making capacity, Johansen said.


“The majority of the people I talk with are in full favor of us being here because they understand a small town has to have a tax base,” he said.


Will ethanol go the way of biodiesel in Rock County?

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