Understanding the complexities of a global market has become an ever-challenging endeavor, but one four state corn checkoffs have set out to tackle with a three-year competitive study of the top corn exporting countries.
As part of this work, a delegation including representatives from the Illinois Corn Marketing Board, Iowa Corn, the Nebraska Corn Board, Ohio Corn & Wheat traveled to Brazil last month to better understand the country’s role in the global agricultural economy.
“During this mission, we had an amazing opportunity to see a good portion of the country, giving us a nice perspective of Brazil’s farming capabilities,” said Mark Wilson, Illinois Corn Marketing Board Export Committee Chairman. “I felt fortunate and grateful to have learned more about this key competitor.”
The mission included visiting Brazilian farms to learn about cropping and production practices; meeting with local transportation officials and touring infrastructure like ports; and learning more about local ethanol production.
“We traveled to a large farm where we learned how Brazilian farmers triple crop in some areas,” Wilson said. “Soybeans are planted first, followed by planting of corn and grass. The grass comes up first and gets a good start then the corn takes over. After corn harvest, the grass begins to regrow at which time cattle are turned out for three months and the cycle starts over. Corn production in Brazil has nearly doubled in the past ten years due to this cropping system.”
The team visited the Harbor Secretary of the Docks Company of Para state to the north of Belem and toured the new Porto de Vila do Conde which is located on the Amazon River. This port has been strategically located so that Brazil can export to the world. There, the group met with the administrator and the operational supervisor and learned about future infrastructure projects.
“They have several improvements underway they hope to be done with in the next five years,” Wilson said. “These include finishing the north south railroad, building a final lock on one the Amazon rivers and building a 25-mile canal to carry barges to the dock. When these projects are completed, government officials estimate it will decrease transportation costs to the port by 30 percent and will allow them to export three times as much product from this port.”
In the United States, ethanol plants can produce ethanol all year due to corn’s storability. Sugarcane cannot be stored, so Brazilian plants only produce ethanol for the short time around the sugarcane harvest. When the plant is operating, the waste from the ethanol process is called bagasse. The bagasse is burnt at the plant to produce the energy needed to run it. So, when the plant is not producing ethanol, it is selling electricity to the grid.
“Ethanol plants there are currently doing research on utilizing corn during the off season so that the plants could run year-round,” Wilson stated.
The Brazil mission was one of the first of such learning journeys planned in the next two years to help farmer organizations better understand the competitive pressures facing American agriculture. Additional investigations are tentatively planned for Argentina, Ukraine, South Africa, China, Australia and Central Africa.
“These missions allow participants to better understand the internal advantages and disadvantages of each area of the world. By asking questions around broad issues such as biofuels, transportation infrastructure, policy and livestock we will get a grasp of their internal supply and export demand potential – essentially better understanding the competition,” explained Wilson.