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Master of Agribusiness

Feasibility Study of a 100-Million Gallon Ethanol Plant in Des Moines, Iowa

Nathan Broders, Gretna, Neb., defended his thesis, “Feasibility Study of a 100-Million Gallon Ethanol Plant in Des Moines, Iowa,” November 22, 2010.  Broders is in the Distillers Division with Hansen Mueller Co. in Omaha, Neb.  He graduated from Kansas State University in December with a Master’s in Agribusiness (MAB). 

Renewable energies such as ethanol are becoming more popular as the U.S. looks for way to become more energy independent from oil.  The demand for ethanol created a rapid growth of ethanol plants in the early to mid-2000s. Broders analyzed United States Department of Agriculture, Pro Exporter, Advance Trading, and other sources to examine the economic feasibility of building an ethanol plant near Des Moines, Iowa.

“We examined the location because it would be one of two plants in a nine-county area producing 203.59 million bushels of corn, it has multiple rail access for ethanol and distillers grains transportation, and has access to multiple interstates for trucking,” Broders said.

After analyzing the production and input costs including corn, natural gas, electricity, denaturant, chemicals and yeast, water and sewer, as well as outputs of ethanol and distillers grains, Broders found building the ethanol plant would be feasible.

“Building a new ethanol plant at this time may be a good investment, but buying an existing plant is an even better investment. With the high risk associated with the ethanol industry, it makes more sense to purchase an existing facility,” Broders said.

Allen Featherstone, Professor of Agricultural Economics and Broders’s thesis advisor, said, “With the renewable fuel goals set by the U.S. government, the corn-based ethanol industry currently is an important component to meet those mandates.  As such, the economic feasibility of ethanol production is important.  Mr. Broders considered the economic feasibility of a 100 million gallon ethanol plant under a variety of scenarios.  While the baseline scenario is economically feasible, the study also examines several scenarios where the plant would not be economically feasible.”

The full thesis publication can be found online on K-State’s Research Exchange at http://hdl.handle.net/2097/6763.