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Unlikely Allies
Brazil, U.S. compete but may cooperate in ethanol exports
By LORI POTTER Hub Staff Writer

“China is gonna be a huge importer of ethanol and already is,”

SMITHFIELD — An ethanol-focused U.S. trade mission to Brazil might sound like a waste of time and travel expenses. The relationship between the world’s top two ethanol producers and exporters would seem to be all about competition for the same markets, not cooperation.

However, the truth is more complex, said Smithfield farmer and Nebraska Corn Board Director Dennis Gengenbach.

“China is gonna be a huge importer of ethanol and already is,” Gengenbach said, and also is a big market for dry distillers grains as livestock feed. Distillers grains are the co-product when corn is processed into ethanol.

He explained why it’s mutually beneficial for the top two ethanol producing countries to build a united front when dealing with Chinese importers.

“If China doesn’t like the price of something, they just cancel a contract and buy somewhere else,” Gengenbach said, which is a problem ethanol producers in both the United States and Brazil have experienced.