Why Ethanol Plants Are Vital to the Food Supply Chain

In partnership with: Wisconsin Department of Agriculture, Trade and Consumer Protection.

Ethanol is an essential part of various supply chains in Wisconsin, from agriculture production to food transportation and even medical supplies.

“In addition to producing homegrown renewable energy in the form of biofuel, ethanol production creates demand for Wisconsin corn,” says Angela James, deputy secretary of the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP). “Maintaining the infrastructure of Wisconsin’s ethanol industry is also important to position our state for continued innovation in biofuels.”

Erik Huschitt, CEO & general manager of Badger State Ethanol in Monroe, says Wisconsin’s ethanol plants process four out of every 10 rows of corn in the state. In addition to supporting agriculture through the use of corn, the ethanol industry also produces 2,100,000 tons of dried distillers grain, which is a high-quality feed that contains the protein and fat that existed in the corn once the starch is removed.

“While all this economic activity is generated, ethanol is also cleaning our environment, assisting our country in energy security and saving the consumers money at the gas pumps,” he says.

Dry Ice Demand

Ethanol production creates CO₂ as a byproduct, which is critical to food and beverage packaging – and to the production of dry ice.

James explains that when COVID-19 vaccines were developed, dry ice became especially important in keeping certain vaccine materials at the proper temperature. That demand for dry ice was felt throughout the supply chain, including ethanol plants.

“Dry ice and CO₂ are critical to the food processing industry for a variety of applications,” she says. “First, CO₂ is used to ‘deoxygenate’ the packaging for meat and cheese products. By blowing CO₂ into packaging, you evacuate the oxygen and ensure that the product stays fresher for delivery to consumers.”

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Second, dry ice is also used to ship a lot of food products, including the important strains of bacteria and other ingredients that are used around the world to make cheeses.

“Wisconsin is known as the Dairy State, and many yeast and cultures are transported every day to support our cheese and dairy industry,” Huschitt says. “This uses a huge volume of dry ice, and during COVID, that industry made it known that without the dry ice, the dairy industry would face severe issues.”

Additionally, the spent grains from ethanol plants are an important feed source for the livestock industry. Not only do they provide vital nutrients, but they are also affordable and available when other types of feed may be in short supply from poor production (i.e., drought or floods). This helps to provide stability to animal feed prices, which helps stabilize the pricing of the state’s food.

Money Matters

Early in the ethanol industry’s growth, the federal government provided support payments as the industry was fragile and in its infancy, but that funding ended decades ago.

However, in late 2020, Governor Tony Evers allocated approximately $3.25 million of Wisconsin’s federal CARES Act funding to bolster Wisconsin’s ethanol supply chain.

“Because of COVID-19, people were driving less and there was a precipitous drop in demand for ethanol-blended fuel,” James says. “Our state’s ethanol industry suffered some significant losses because of the loss of this market. At the same time, we were asking them to produce more CO₂ for food processing and biomedical supplies. This funding helped offset some of those losses and helped maintain the availability of these plants for CO₂ production and corn purchases.”

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In an effort to better position the industry to respond to similar situations in the future, DATCP worked directly with the Wisconsin Biofuels Association, which represents Wisconsin’s nine ethanol plants, to gather data on the financial impact COVID-19 had on the ethanol industry and determine the logistics for allocating the CARES Act funding.

“Ethanol plants have continued to become more energy efficient as technology and production practices have evolved over the past two decades,” Huschitt says. “Ethanol is available today in large volumes. It supports American agriculture; it has fueling infrastructure that exists today; and it can be used in today’s large and small vehicles.”