Brazil Makes Corn Ethanol, Too

Brazil's ethanol is made from sugarcane, right? You know - the stuff whose rate of fossil fuels in to biofuels out is seven times better than that of corn ethanol, according to one industry site?  Well, soon enough, the Brazilians say they will be making at least some ethanol from corn, too.

Here's part of the irony at work:  Lots of Brazilians patted themselves on the back at the first of the year, when the U.S. tax credit for ethanol expired, along with a $.54 per gallon tariff on imported ethanol.  Sure, there was little immediate chance that tankers of Brazilian sugarcane ethanol would be lined up soon at U.S. ports, as the Brazilians - after years of underinvestment in their cane fields - weren't producing enough to keep the price competitive domestically with gasoline. In fact, last year`s Brazilian ethanol production was down 19%, and flex-fuel car owners put more and more gas into their tanks.

As a result, Brazil became America's top customer for corn ethanol in 2011.

A big factor in Brazil's strong demand for ethanol has been the introduction of so-called flex-fuel cars, which can take any blend of gasoline and ethanol.

Well, last month the Brazilians introduced the first flex-fuel ethanol plant in that country - designed to make the alternative fuel from sugarcane when that crop is abundant, and to switch easily over to corn when there's a lot of that crop in the market. And there often is too much corn in Mato Grosso.

Farmers in Brazil's top soy state like to grow it as a second crop, in rotation with their beans. But though livestock demand locally is increasing - more poultry and hog production, and a bit more cattle confinement - there is still a glut of corn in Mato Grosso just about every year.

With freight rates to get the product out making Mato Grosso corn far from attractive to foreigners, and even to most other Brazilian states - producers in recent years have had to rely on government purchase auctions to prop up prices.

The Usimat Flex plant, in Campos de Julio, Mato Grosso, will be able to process up to 300 tonnes of corn per day, producing up to 28,000 gallons of corn ethanol per day. Plus, they will get DDGs (dried distillers grains) for feed rations, presumably to use in the state's slowly growing confinement operations.

According to a local news report, it will cost $2.55 per gallon to make corn ethanol (not counting the value of the DDGs,) and $2.28 per gallon to make the fuel from sugarcane.

Brazilian federal Senator Blairo Maggi, himself a big Mato Grosso producer, visited the plant last month, and later told Senate colleagues that if it makes economic sense, more Brazilian distilleries could be adapted to producing corn ethanol between sugarcane harvests.

Yes, it would appear that corn ethanol may be the real Sweeter Alternative - at least for producers here.