Tarriff Free Beef to Enter the US, Brazil Fades as US Ethanol Competitor

Tarriff Free Beef to Enter the US, Brazil Fades as US Ethanol Competitor

President Trump announced a 90-day tariff-free import of 300,000 metric tons of ground beef. Brazil is becoming less of a player in the global corn market as ethanol plant construction continues to expand across that country. Crossroads Co-op Regional Manager Bryan Irey says China is driving that shift.

“China has invested a tremendous amount in Brazilian ethanol, just from the perspective that if they make ethanol in China, they have to ship three vessels of corn to produce the equivalent of one vessel of ethanol. It’s much simpler for them to build the ethanol infrastructure in Brazil and only pay freight on one boat of ethanol freight to get it to China, and that’s their plan.”

Brazil and China have been building their economic relationships over the last several years, with significant Chinese investment flowing into Brazilian infrastructure. And Irey says that dynamic could ultimately work in favor of the American farmer.

“I think that with Brazil out of the picture and Ukraine’s ability to export corn here for the foreseeable future somewhat limited, it’s going to be really, really, really good for the U.S. producer as time goes on here. “

He says it could take a couple of years before that infrastructure comes to fruition, but there are thoughts that six-dollar corn could return.