April 30, 2015

2.6% of Mato Grosso's Corn used for Ethanol Farmers Want More

Farmers in the state of Mato Grosso are so good at producing corn that their main problem is how to commercialize the crop. The state is expected to produce over 17 million tons of corn in 2015, but only a little more than 3 million tons will be consumed domestically within the state. The remaining majority of the corn production must be shipped to export facilities or to the livestock industry in southern Brazil at very high freight rates. The abundant supply of corn has led to a shortage of storage space in the state and low corn prices. Farmers want to increase the domestic consumption and they feel one of the best ways is to utilize more of the corn is to produce ethanol.

Currently, most of the three million tons of corn consumed domestically in the state goes to the livestock industry with the remaining small amount used to produce ethanol. The state has nine sugar mills that make ethanol from sugarcane and three of those mills have already been retrofitted to utilize corn to make ethanol during the rainy summer months when sugarcane is not being harvested. Prior to being retrofitted, the sugar mills would be closed for the 3-4 months when sugarcane was not available (December-March). After the retrofit, the mills remain operating nonstop year round. The remaining six sugar mills in the state are also expected to be retrofitted to utilize corn in the future.

During the 2015/16 harvest season, Mato Grosso is expected to produce 1.05 billion liters of ethanol, of which, 180 million liters will be made from corn. The state is expected to harvest 16 million tons of sugarcane in 2015/16 with 3 million tons going toward sugar production. It is estimated that 450,000 tons of corn in the state will be used for ethanol production in 2015 (approximately 2.6% of the state's corn production).

At a recent meeting held within the state, corn producers and potential ethanol mill operators met to discuss the potential for corn-based ethanol production facilities within the state. Producers are interested in constructing mini-mills instead of the conventional sized corn-based ethanol facility.

According to the ex-president of the Mato Grosso Soybean and Corn Producers Association (Aprosoja-MT) Glauber Silveira, in some regions of the state there are few producers and they do not have the wherewithal to back a R$ 400 million ethanol facility. As a result, the goal of the meeting was to present alternatives to the traditional sized facility.

Also present at the meeting was a representative of Central Harvest States. Clayton Anselmo de Melo, who emphasized that commercialization and logistics of the ethanol are just as important as the technical aspects of producing the ethanol. He told those present that CHS has 15 years of successful experience with ethanol production and commercialization in the United States and that CHS is interested in working with producers in Mato Grosso to help develop their ethanol sector.