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December 17, 2020

More of Mato Grosso's Corn being Consumed Internally

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

The state of Mato Grosso is the largest corn producing state in Brazil and it is also Brazil's largest corn exporting state as well, but more and more of the state's corn is now being consumed internally. The biggest increase in corn use is for the production of ethanol.

According to the Mato Grosso Institute of Agricultural Economic (Imea), during the 2019/20 growing season, farmers in the state produced 35.45 million tons of corn and the domestic consumption in the state was 10.44 million tons. Approximately 29.4% of the state's corn production was consumed internally for ethanol production and livestock rations.

For the 2020/21 growing season, Imea estimates that the state will produce 36.29 million tons of corn, which would be an increase of 2.3%. The internal demand is expected to increase 17.9% in 2020/21 due mainly to new corn-based ethanol facilities coming online and additional demand from livestock producers. Therefore, Imea is anticipating that 33.8% of the corn produced in the state in 2020/21 will be used internally.

The use of corn to produce ethanol has increased tremendously since Brazil's first corn-based ethanol facility started production in 2017 in the city of Lucas do Rio Verde, which is located in south-central Mato Grosso. Since then, there have been numerous corn-based ethanol facilities built in the state as well as the retrofitting of numerous sugar mills to utilize corn to make ethanol when sugarcane is not available during the summer rainy season.

The use of corn to produce ethanol is a significant structural change in Brazil which at one time had more than 400 sugar mills that utilized sugarcane to produce sugar and ethanol.