IDEAS home Printed from https://ideas.repec.org/a/sae/ecdequ/v24y2010i1p74-86.html
   My bibliography  Save this article

Locational Choices of the Ethanol Industry in the Midwest Corn Belt

Author

Listed:
  • Mônica A. Haddad

    (Iowa State University, Ames, IA, USA, haddad@iastate.edu)

  • Gary Taylor

    (Iowa State University, Ames, IA, USA)

  • Francis Owusu

    (Iowa State University, Ames, IA, USA)

Abstract

The Corn Belt has experienced a rapid expansion of corn-based ethanol plants. This has provided researchers the opportunity to examine the relative importance to the renewable fuels industry of several location factors previously identified as important to agro-industries. Using probit regressions, this study identifies the factors significant to ethanol firms’ location decisions in the four-state study area of Iowa, Illinois, Minnesota, and Nebraska. In Iowa and Illinois, where corn is largely ubiquitous, firms move beyond corn supply to consider other localized factors in their decision-making process. Factors such as rail access, population density, and proximity to blending terminals emerge as significant considerations. Probit regressions comparing states reveal the competitive advantages that each offers to ethanol firms. The importance of the findings to economic development professionals is discussed and areas for future research are suggested.

Suggested Citation

  • Mônica A. Haddad & Gary Taylor & Francis Owusu, 2010. "Locational Choices of the Ethanol Industry in the Midwest Corn Belt," Economic Development Quarterly, , vol. 24(1), pages 74-86, February.
    • Handle: RePEc:sae:ecdequ:v:24:y:2010:i:1:p:74-86
    DOI: 10.1177/0891242409347722
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/0891242409347722
    Download Restriction: no
    File URL: https://libkey.io/10.1177/0891242409347722?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Plantinga, Andrew J. & Lubowski, Ruben N. & Stavins, Robert N., 2002. "The effects of potential land development on agricultural land prices," Journal of Urban Economics, Elsevier, vol. 52(3), pages 561-581, November.
    2. Kevin McNew & Duane Griffith, 2005. "Measuring the Impact of Ethanol Plants on Local Grain Prices," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 27(2), pages 164-180.
    3. Jason R. Henderson & Kevin T. McNamara, 1997. "Community Attributes Influencing Local Food Processing Growth in the U.S. Corn Belt," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 45(3), pages 235-250, November.
    4. Klose, Steven L. & Anderson, David P. & Outlaw, Joe L. & Herbst, Brian K. & Richardson, James W., 2003. "The Feasibility Of Ethanol Production In Texas," 2003 Annual Meeting, February 1-5, 2003, Mobile, Alabama 35181, Southern Agricultural Economics Association.
    5. Kenkel, Philip L. & Holcomb, Rodney B., 2006. "Challenges to Producer Ownership of Ethanol and Biodiesel Production Facilities," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 38(2), pages 1-7, August.
    6. John P. Blair & Robert Premus, 1987. "Major Factors in Industrial Location: A Review," Economic Development Quarterly, , vol. 1(1), pages 72-85, February.
    7. Rask, Kevin N., 1998. "Clean air and renewable fuels: the market for fuel ethanol in the US from 1984 to 1993," Energy Economics, Elsevier, vol. 20(3), pages 325-345, June.
    8. Camilo Sarmiento & William W. Wilson & Bruce Dahl, 2012. "Spatial Competition and Ethanol Plant Location Decisions," Agribusiness, John Wiley & Sons, Ltd., vol. 28(3), pages 260-273, June.
    9. F. Larry Leistritz, 1992. "Agribusiness firms: Location determinants and economic contribution," Agribusiness, John Wiley & Sons, Ltd., vol. 8(4), pages 273-286.
    10. David L. Barkley & Kevin T. McNamara, 1994. "Manufacturers' Location Decisions: Do Surveys Provide Helpful Insights?," International Regional Science Review, , vol. 17(1), pages 23-47, April.
    11. Greenhut,Melvin L. & Norman,George & Hung,Chao-Shun, 1987. "The Economics of Imperfect Competition," Cambridge Books, Cambridge University Press, number 9780521315647.
    12. Kevin McNew & Duane Griffith, 2005. "Measuring the Impact of Ethanol Plants on Local Grain Prices," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 27(2), pages 164-180.
    13. Higgins, Lindsey M. & Richardson, James W. & Outlaw, Joe L., 2008. "The Potential Impact of a Texas High Plains Ethanol Plant on Local Water Supplies," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6533, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    14. Kevin T. McNamara & Warren P. Kriesel, 1988. "Manufacturing Location: the Impact of Human Capital Stocks and Flows," The Review of Regional Studies, Southern Regional Science Association, vol. 18(1), pages 42-48, Winter.
    15. Rigoberto A. Lopez & Nona R. Henderson, 1989. "The determinants of location choices for food processing plants," Agribusiness, John Wiley & Sons, Ltd., vol. 5(6), pages 619-632.
    16. Henderson, Jason R. & McNamara, Kevin T., 2000. "The Location Of Food Manufacturing Plant Investments In Corn Belt Counties," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(2), pages 1-18, December.
    17. Schmenner, Roger W. & Huber, Joel C. & Cook, Randall L., 1987. "Geographic differences and the location of new manufacturing facilities," Journal of Urban Economics, Elsevier, vol. 21(1), pages 83-104, January.
    18. Marc Vesecky & David Lins, 1995. "Factors influencing expansion and contraction decisions by Illinois agribusiness firms," Agribusiness, John Wiley & Sons, Ltd., vol. 11(5), pages 405-413.
    19. Greenhut,Melvin L. & Norman,George & Hung,Chao-Shun, 1987. "The Economics of Imperfect Competition," Cambridge Books, Cambridge University Press, number 9780521305525.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Svanidze, Miranda & Götz, Linde, 2019. "Determinants of spatial market efficiency of grain markets in Russia," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 89, pages 1-10.
    2. Stevens, Andrew, 2015. "Fueling Local Water Pollution: Ethanol Refineries, Land Use, and Nitrate Runoff," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205741, Agricultural and Applied Economics Association.
    3. Brown, Jason P. & Weber, Jeremy G. & Wojan, Timothy R., 2013. "Emerging Energy Industries and Rural Growth," Economic Research Report 262215, United States Department of Agriculture, Economic Research Service.
    4. Ani L. Katchova & Ana Claudia Sant’Anna, 2019. "Impact of Ethanol Plant Location on Corn Revenues for U.S. Farmers," Sustainability, MDPI, vol. 11(22), pages 1-13, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:rre:publsh:v:36:y:2006:i:2:p:140-62 is not listed on IDEAS
    2. Lambert, D.M. & Wilcox, M. & English, A. & Stewart, L., 2008. "Ethanol Plant Location Determinants and County Comparative Advantage," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 40(1), pages 117-135, April.
    3. Henderson, Jason R. & McNamara, Kevin T., 2000. "The Location Of Food Manufacturing Plant Investments In Corn Belt Counties," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(2), pages 1-18, December.
    4. Dayton M. Lambert & Kevin T. McNamara, 2009. "Location determinants of food manufacturers in the United States, 2000–2004: are nonmetropolitan counties competitive?," Agricultural Economics, International Association of Agricultural Economists, vol. 40(6), pages 617-630, November.
    5. Ani L. Katchova & Ana Claudia Sant’Anna, 2019. "Impact of Ethanol Plant Location on Corn Revenues for U.S. Farmers," Sustainability, MDPI, vol. 11(22), pages 1-13, November.
    6. Jason P. Brown & Raymond J.G.M. Florax & Kevin T. McNamara, 2008. "Evolution Of Investment Flows In U.S. Manufacturing:A Spatial Panel Approach," Working Papers 08-06, Purdue University, College of Agriculture, Department of Agricultural Economics.
    7. Jason P. Brown & Raymond J.G.M. Florax & Kevin T. McNamara, 2009. "Determinants Of Investme??T Flows In U.S. Manufacturing," Working Papers 09-10, Purdue University, College of Agriculture, Department of Agricultural Economics.
    8. Marc Vesecky & David Lins, 1995. "Factors influencing expansion and contraction decisions by Illinois agribusiness firms," Agribusiness, John Wiley & Sons, Ltd., vol. 11(5), pages 405-413.
    9. Pruitt, J. Ross & Tilley, Daniel S., 2008. "Location Patterns of Confectionery Manufacturers in a Post NAFTA Environment," 2008 Annual Meeting, February 2-6, 2008, Dallas, Texas 6802, Southern Agricultural Economics Association.
    10. Tenkorang, Frank & Dority, Bree L. & Bridges, Deborah & Lam, Eddery, 2015. "Relationship between ethanol and gasoline: AIDS approach," Energy Economics, Elsevier, vol. 50(C), pages 63-69.
    11. Stevens, Andrew, 2015. "Fueling Local Water Pollution: Ethanol Refineries, Land Use, and Nitrate Runoff," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205741, Agricultural and Applied Economics Association.
    12. Hughes, Jonathan E., 2011. "The higher price of cleaner fuels: Market power in the rail transport of fuel ethanol," Journal of Environmental Economics and Management, Elsevier, vol. 62(2), pages 123-139, September.
    13. Lambert, Dayton M. & Brown, Jason P. & Florax, Raymond J.G.M., 2010. "A two-step estimator for a spatial lag model of counts: Theory, small sample performance and an application," Regional Science and Urban Economics, Elsevier, vol. 40(4), pages 241-252, July.
    14. Lambert, Dayton M. & McNamara, Kevin T. & Garrett, Megan I., 2006. "An Application of Spatial Poisson Models to Manufacturing Investment Location Analysis," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 38(1), pages 1-17, April.
    15. Barkley, David L. & Henry, Mark S. & Bao, Shuming, 1998. "The Role of Local School Quality in Rural Employment and Population Growth," The Review of Regional Studies, Southern Regional Science Association, vol. 28(1), pages 81-102, Summer.
    16. Deborah Bridges & Frank Tenkorang & Greg Nies, 2023. "The Effect Of Market Shocks On The Volatility Of Corn Price," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 31, pages 9-18, June.
    17. Zhang, Zibin & Vedenov, Dmitry V. & Wetzstein, Michael E., 2007. "Can the U.S. Ethanol Industry Compete in the Alternative Fuels' Market?," 2007 Annual Meeting, February 4-7, 2007, Mobile, Alabama 34867, Southern Agricultural Economics Association.
    18. Stevens, Andrew W., 2021. "Ethanol Refineries and Local Land Use," 2021 Conference, August 17-31, 2021, Virtual 315304, International Association of Agricultural Economists.
    19. repec:rre:publsh:v:39:y:2009:i:3:p:269-86 is not listed on IDEAS
    20. Jean-Marc Siroën, 1993. "Marchés contestables, différenciation des produits et discrimination des prix," Revue Économique, Programme National Persée, vol. 44(3), pages 569-592.
    21. Simon P. Anderson & Régis Renault, 2011. "Price Discrimination," Chapters, in: André de Palma & Robin Lindsey & Emile Quinet & Roger Vickerman (ed.), A Handbook of Transport Economics, chapter 22, Edward Elgar Publishing.
    22. Hueth, Brent & Taylor, Christopher W., 2013. "Spatial Competition in Agricultural Markets: A Discrete-Choice Approach," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150506, Agricultural and Applied Economics Association.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:ecdequ:v:24:y:2010:i:1:p:74-86. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.