Aug 03, 2010
First Corn Ethanol Plant to be Inaugurated in Mato Grosso
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
In a country that leads the world in ethanol produced from sugarcane, the farmers in Mato Grosso are trying to chart a new path by opening their first ethanol plant that uses corn instead of sugarcane to produce ethanol. The Association of Soybean and Corn Producers of Mato Grosso in association with Embrapa, are scheduled to open their first experimental corn ethanol plant this week.
The reason why they are experimenting with corn based ethanol production is because the state produces much more corn than what can be consumed within the state. The excess corn needs to be shipped out of the state at extremely high transportation costs. As a result of the excess production and high transportation costs, the cash price for corn in the state has been below the cost of production for nearly two years. The only profitable alternative for farmers is to sell their corn to the government at a guaranteed minimum price, which is significantly higher than the cash price. The government's minimum price for corn in northern Mato Grosso is R$ 13.98 per sack or approximately US$ 3.95 a bushel whereas the cash price is approximately R$ 9.50 per sack or US$ 2.75 per bushel. The problem is that the government has been purchasing the corn at a slow pace and farmers are worried that it will run out of money before all the corn is bought.
In addition to studying the feasibility of producing ethanol from corn, Embrapa is also looking at the possibility of converting existing biodiesel plants into a sort of "flex plant" that can switch from producing biodiesel to corn based ethanol depending on market conditions.
Mato Grosso produces 850,000 liters of sugarcane based ethanol, which is enough to supply the needs of Mato Grosso, as well as the states of Rondonia, Acre, and Amazonas with 150,000 liters left over to ship to other regions. While making ethanol from corn may help to utilize the excess corn produced in the state, the ethanol would need to be shipped out of the region. This raises the question if the existing infrastructure and logistics are capable of handling additional ethanol production at an economical cost.