A group of Nebraska, Iowa, and Ohio corn farmers, following their return from a multi-state trade mission to Brazil, expressed excitement about the potential relationships with the South American nation the similarities of ethanol fuel in both countries.
The objective of this joint mission was to gain a better understanding of Brazil's role in the global market of energy and agriculture and determine how Nebraska and the United States can be partners with Brazil on worldwide ethanol markets.
Participants on the mission included Nebraska Corn Board directors Debbie Borg from Allen and Dennis Gengenbach from Smithfield. Kim Clark, director of biofuels development on staff with the board, also was on the tour.
Brazil is the No. 1 sugarcane producer and exporter in the world. The country also is second in ethanol production, trailing only the United States. But Brazil is the leading ethanol exporter worldwide. At least 25% of each gallon of gasoline sold in Brazil must, by law, contains at least 25% ethanol.
"The trip was definitely eye opening and educational," says Borg. "The commonalities and similarities of Brazilian agriculture in comparison to the United States are amazing. The biggest issue they are dealing with is drought. It is very severe and their sugarcane, corn, soybean, and coffee crops are suffering."
Brazil's closed-loop ethanol system of producing electricity from bagasse, the byproduct of sugar and ethanol production, is well known. Although the U.S. does not produce electricity from ethanol production, the U.S. produces distillers grains for livestock feed.
"Our ethanol story and the production of distillers grains are important for the ethanol industry in the United States. We need to be better about reaching out to consumers and educating them," according to Dennis Gengenbach.
"The transportation infrastructure, or lack thereof, was interesting to the U.S. visitors," Borg says. "To get grains to the port for export, trucks have to haul the grain hundreds of miles on narrow roads," said Borg. "It will be a while before Brazil expands their infrastructure. The U.S. already has water and rail infrastructure developed, and we can use that to our advantage as we further develop export markets for our distillers grains and ethanol."
In addition to infrastructure advantages in the U.S., the U.S producers felt that export of distillers grains and ethanol are key to being export leaders. "Brazil's growth potential to increase ethanol production is unlimited. Only 5.5% of total cropland is used for sugarcane production for ethanol. There is much more land to tap into for sugarcane production."
Gengenbach says that some of the key decisions Brazil needs to make are which areas to develop next for cropland and where to build infrastructure. "The United States needs to stay ahead of export markets and transportation infrastructure before Brazil catches up to us," he adds.
During the trade mission, the team also:
• Met with UNICA--the Brazilian Sugarcane Industry Association that represents sugar, ethanol, and bioelectricity producers--to discuss sugarcane producers and expectations in Brazil
• Visited the Brazilian Bioethanol Science and Technology Laboratory to discuss sugarcane varieties and GMO's in sugarcane
• Met with Delphi Powertrain South America Tech Center to learn about flex-fuel vehicles, how they differ from flex-fuel vehicles in the United States and what information could be communicated to automobile manufacturers in the United States
"Brazil is fully supports U.S. ethanol and they understand the importance of relationships and working together," Gengenbach says. "All of the key contacts we met were very interested in partnering with the U.S. to expand ethanol exports into key foreign markets, especially China and India."