August 9, 2012

Corn is being Studied for Ethanol Production in Brazil

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The huge increase in the safrinha corn production in Mato Grosso and the lack of storage space has forced grain elevators in the state to pile the corn outside while they try to move it out of the state. In addition to a chronic lack of storage space, new regulations concerning Brazilian truck drivers is resulting in a lack of trucks to transport the crop to livestock producers in southern Brazil or exporters in southeastern Brazil. More than 60% of the grain production in the state is transported via trucks.

The newly enacted regulations stipulate that a truck driver must rest for 11 hours during a 24 hour period. Additionally, after four hours of driving, he must rest for half an hour. Various organizations representing truck drivers have blocked numerous highways throughout the country in recent weeks protesting what they feel is a direct assault on their earning potential. As a result, the number of trucks available to transport the crop has been reduced just at the time when more trucks were needed especially in the interior of the country.

Grain elevator operators feel they were lucky this year because the soybean production in the state was shipped out faster than normal and their silos were essentially empty when the safrinha corn harvest began. They are very worried about next year when the state is expected to produce a record high amount of both soybeans and corn.

In order to take advantage of the excess corn production in the state, various industries are researching the utilization of corn for the production of ethanol in the state. There is one ethanol mill in the state that is already using corn to supplement their sugarcane-based ethanol production. The company called Mato Grosso Mill (Usimat) is located in Campos de Julio and they were producing all their ethanol from sugarcane until they modified their mill to use corn and sorghum as well. For most of the year they produce ethanol from sugarcane, but in between sugarcane harvests, they utilize some of the excess corn and sorghum produced in the region.

A second company is now researching the possibility of building an ethanol plant that only utilizes corn as the raw material. The company called Fiagrill is located in Lucas do Rio Verde, which is one of the principal safrinha corn producing regions of the state. In addition to the fact that the municipality is a major corn producer, they are also considering this location because of the poultry, swine, dairy and feedlots in the region that could use the distiller's dry grain, which is a byproduct of corn-based ethanol production, as a source of animal rations.

While the state continues to struggle with inadequate infrastructure to handle its ever expanding grain production, farm organizations are petitioning the federal government to accelerate their programs that subsidize the purchase of excess grain in central Brazil and move it to grain deficient regions in southern Brazil.