Climate Change Trade

American Ethanol Producers Say They Might Buy Brazilian Corn Instead

JM Ashby
Written by JM Ashby

The Trump regime recently threw American corn farmers a bone by revoking environmental regulations that prohibited the sale of E15 gasoline (gasoline with 15 percent ethanol content) during the busy summer travel months, but ethanol producers are not necessarily going to buy American corn.

The CEO of the Renewable Fuels Association (RFA) says American ethanol producers may start sourcing their corn from Brazil because American corn is just too expensive.

“I haven’t heard that it is happening, but I have heard some chatter that there are people looking at it, because of the growing spread between U.S. and Brazil corn prices,” Chief Executive Geoff Cooper said in an interview on the sidelines of the Ethanol Summit 2019 in Sao Paulo, organized by cane industry group Unica.

U.S. corn is fetching five-month high prices, including a more than 25% increase since May, as the crop outlook has deteriorated due to unfavorable weather.

Prices in Brazil have risen more slowly, and the country is harvesting its largest corn crop ever.

The "unfavorable weather" this report refers to is the historic level of rain and flooding fueled by climate change that has rendered large swaths of the Midwest unsuitable for planting this year. An increasing number of farmers are simply giving up and the Trump regime recently floated the idea of expanding Trump's second bailout to cover crops that were never actually planted.

There are a myriad of ways in which Trump's bailouts could end up making no significant difference at all as each bailout is blunted by other factors. A bailout is no substitute for losing access to foreign markets under Trump's trade war and a second bailout coupled with regulatory changes is no match for our climate crisis. And there's no reason to think a third potential bailout implemented during the next growing season would be different.

If the federal government doesn't take a wholesale approach to expanding access to foreign markets while investing heavily in climate resiliency, we're looking at permanent bailouts for the agricultural industry.

It's not as if we were necessarily prepared for the future before Trump took office, but the Trump regime is using band-aids on a gaping wound while denying that the wound exists.

  • muselet

    Ethanol producers (I will spare you all my usual rant about the stupidity of using food to make fuel) want the cheapest feedstock they can find, to maximize their profits. If the price of Brazilian corn plus shipping is lower than the cost of US corn, ethanol producers will buy Brazilian corn.

    All bailouts and weakened regulations will do is distort the marketplace in unpredictable ways. No matter what random actions the administration takes, US corn farmers will not be made whole. More than a few of them will lose whatever land they own and become the modern equivalent of tenant farmers. And that’s before we consider the consequences of climate change and tariffs.

    Some of this could have been avoided or at least mitigated if someone around Donald Trump had even a primary-school understanding of economics.

    –alopecia

  • Badgerite

    This is what truly bothers me about the idiotic climate change deniers who are selling their crap to farmers. The evidence is already there. This isn’t a theory. It is a fact. And though the results may be hard to quantify exactly, results there will be. And like the Dust Bowl days of the 1920’s, the results could well be devastating for our agriculture and our farmers. You can’t actually eat a ‘bail out’.