Ethanol Makers Consider Buying Corn from Brazil

Posted on 06/18/2019 11:53 AM

U.S. ethanol producers are considering importing corn from Brazil, according to Geoff Cooper, the head of the Renewable Fuels Association (RFA). “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," he said in an interview at the Ethanol Summit 2019 in Sao Paulo. He says that there are some locations where doing so would make sense logistically, such as the West Coast.

U.S. corn prices have surged 25% since June, and while Brazilian prices are climbing, the price rise has been more gradual. In addition, some areas are still struggling to transport corn to ethanol facilities due to swollen waterways.

Cooper detailed that ethanol prices have kept up with rising corn prices, but at some point they will “run out of room.” That would put additional pressure on margins, according to Cooper, who adds that some mills are already running in the red and have idled capacity.

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