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Brazil Mission Trip

Posted on April 24, 2014 at 10:45 AM by Iowa Corn

Brazil is a large country with a large population with most of the population living in cities. Many of the people work in some sort of government job. Brazil also is developing a manufacturing industry that employs people.  The Brazilian economy is steady with agricultural exports being an important part of their economy. Soybeans, coffee, sugar, corn, and citrus are some of the exports. I recently went on a mission trip to Brazil and saw many new buildings being built in the cities. Our guide said that the government is providing reduced interest loans to stimulate new apartments to help people into better housing.

The ethanol industry was developed in Brazil because they didn’t have any oil deposits and they wanted to develop the rural economy. All stations were required to sell ethanol fuel and cars being sold have to be flex fuel. The gasoline sold is 22% ethanol so every engine runs on at least 22% ethanol. During our trip, we saw many motorcycles and small engines running successfully on E22.

In 2005, a large petroleum deposit was found offshore. Since that time the government has encouraged the building of refineries and other infrastructure to handle oil. The government is currently controlling the cost of oil below the cost of production to control inflation. The low price of gas is hurting  ethanol  production because it is more economical to use gas in the cars. Many believe after this years election, the price of gasoline will increase.

 In the last 10 years, 100 new sugar mills were added. Brazil currently has 400 mills, and 240 of them produce both sugar and ethanol and 120 produce only ethanol. The expansion has led to too much capacity for the market. In the last 5 years, more than 40 mills have changed ownership or undergone reorganization. This year 14 mills will not be in production.

Below is a list of items that I learned from this mission trip:
  1. Transportation infrastructure remains one of Brazil’s biggest challenges. The United States has the competitive advantage but we must not allow our system to deteriorate any farther.
  2. Sugarcane Ethanol is being marketed as sustainable. We must continue to show our gains in producing corn in a sustainable way.
  3. Brazil believes that industrial uses of ethanol and exports will allow them to grow their industry. We currently have the advantage in developed production capacity and export ability.
  4. Government policies can promote or hinder
Roger Zylstra is a farmer in Jasper County and President of Iowa Corn Growers Association. On his farm they raise corn, soybeans, pasture ground and also own a hog feeding operation. Roger enjoys the challenges of working outdoors, growing food and fiber. He recognizes there will continue to be opportunities and challenges in farming.

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