Iowa spinning corn into gold

December 25, 2006|By Tom Pelton | Tom Pelton,Sun reporter

EMMETSBURG, Iowa -- Jeff Stillman is a fourth-generation farmer who's been battered by floods, droughts and personal hardship. But this fall, his corn turned to gold.

A national boom in the use of ethanol - a fuel distilled from corn - almost doubled the value of his harvest. So for Christmas, Stillman is giving his wife a diamond necklace and a trip to Hawaii. And he sold a few bushels to buy himself a red Ford Mustang.

"Confidence levels among farmers here are 100 percent higher now than they were in the past, because of ethanol," said Stillman, looking out his kitchen window at 1,200 acres of cornstalk stubble beside an icy lake. "There were a lot of people who went completely broke farming here during the 1980s. But some folks now are very well-heeled."

Good spirits are brimming in Emmetsburg and other tiny Midwestern farm communities that are building ethanol plants after decades of economic loss. As Maryland considers proposals to build the East Coast's first ethanol plant, the experience in Emmetsburg offers a glimpse of what a plant might mean for corn farmers on the Eastern Shore.

Ethanol plants also are a boon for small towns that are in need of jobs and hoping to slow an exodus of young people. But there is a downside to the ethanol craze. Hog and chicken farmers, among others, complain about the government subsidies that are driving the demand for corn-based fuel. They need corn to feed their animals and say that higher costs for grain cut their profits and inflate prices for consumers.

"The U.S. needs to decide if we want cheap fuel or if we want cheap food," said Greg Lear, who raises hogs near Emmetsburg. "Right now, pork is pretty cheap, but we could soon have more expensive food for the public."

Some environmentalists support ethanol because burning it produces less global warming gases. And it could reduce dependence on Middle East oil.

But others question whether America's farms can ever grow enough fuel for the country's vast fleet of vehicles and they fear that an expansion of industrial-style agriculture would mean more pollution from fertilizers.

There's no debate that ethanol means cash for corn growers. Stillman and 90,000 other Iowa farmers earned an added $2 billion this year - an average of $22,000 more each - by selling corn at prices higher than usual because 26 new ethanol plants are competing for corn across the state, said David Miller, director of research for the Iowa Farm Bureau.

Eleven more ethanol plants are being built as Iowa seeks to capitalize on its role as the nation's biggest producer of grain-based fuel. Nationally, 107 ethanol plants are in operation and 50 more are under construction.

"Iowa is going to become the energy capital of the U.S." said Jim Boyer, a corn grower near Emmetsburg. "The Midwest will become like the Middle East for alternative fuel. It's definitely an exciting time to be in agriculture."

A $65 million ethanol plant opened in Emmetsburg in March 2005, with 40 workers distilling 50 million gallons of ethanol a year. The factory is planning a $200 million expansion, which would enable 70 employees to make 125 million gallons a year. As part of the expansion, the Broin Co. plant next year plans to become the first in the nation to brew ethanol not only from corn kernels, but from discarded stems and stalks, said Mike Muston, a vice president of the Sioux Falls, S.D., firm.

This "cellulosic" ethanol could mark a breakthrough for U.S. energy independence because the method can produce more than twice as much fuel per acre as kernel ethanol, according to the Union of Concerned Scientists, a nonprofit group that advocates for environmental issues.

"It's a fast-moving industry that provides cutting-edge opportunities in rural America," said Daron Wilson, general manager of the Broin Co. operation in Emmetsburg, called the Voyager plant.

Corn prices are so closely tied to the pulse of life in Emmetsburg that a red-lighted sign flashes them above the town's grassy square. "Voyager Ethanol. Corn $3.37" per bushel, it proclaimed on a recent afternoon. A year earlier the price was $1.69.

The increase has brought hope to a town in which the population fell 20 percent, from 4,621 in 1980 to 3,706 this year. High interest rates and low corn prices in the 1980s spurred disenchantment, and many young people left.

Near the stoplight at Main Street and Broadway in Emmetsburg, the windows of Wigdahl's Hardware store are empty and dark, like several other closed shops. An old-time movie house and a feed dealer are among the businesses still operating on Main Street, which is surrounded by seemingly endless fields and grain silos. The Riviera Theater attracted an audience of three to a recent show by offering free popcorn. Nearby, the McNally Bake Shop is closed, having moved to a casino that opened last summer on the outskirts of town.

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