The new design of corn production in Brazil, following the arrival of plants that process the grain

The transformation of corn into ethanol is a path of no return in Brazil, especially in Mato Grosso. The Mato-Grossense Institute of Agricultural Economics (IMEA) estimates a production of 40,5 million tons of corn for the second harvest 21/22. Of this total, 7,6 million tons will be consumed in ethanol production in the same period (Jul/22 to Jun/23).

For the central-west region, Conab projects a production of 64,3 million tons of corn in the 21/22 harvest, and 3,3 billion liters of corn ethanol. The cultivation of second-crop corn in the region brought significant benefits to the expansion of Brazilian agribusiness and local economic development. The consolidation of a strong internal market, with financial security for the producer; the intensification of beef cattle farming using inputs generated for animal production (DDG); the increase in cereal planting without the need to open new agricultural areas, which guarantees both the production of ethanol and the commercialization of the grain as food; boosting the biomass market with the expansion of exotic plantations to generate energy that heats the power plants' boilers. In addition to the social benefits with the generation of new jobs and foreign exchange for municipalities and states.

Looking back, it is possible to say that this all started in the 1980s, with the introduction of soybean cultivation in Mato Grosso using the direct planting technique, when the seed is placed in the soil without prior plowing. In this process, it was discovered that soybean farming provides the fixation of essential nutrients in the land, which allows the planting of other crops, such as corn. This gives rise to second-crop corn, which is nothing more than a productive off-season. But even with this possibility, decades passed before it was actually viable for the producer to invest in so-called off-season corn.

This is because the cost of corn was very expensive: there was no price liquidity to fix the grain's production costs. Producers often resorted to the Equalizer Award Paid to Rural Producers (Pepro), an economic subsidy granted by the Federal Government as part of the minimum price guarantee policy (PGPM), which aimed to guarantee income to the farmer and which, in a certain way, helped to absorb part of the planting cost.

This story changed with the arrival of the corn ethanol industry. Without a doubt, this was the major driver for the growth in second-crop corn production, it was the stimulus that producers were missing to develop this important crop.

Since the installation of the first corn ethanol plant, a lot has changed in the Center-West and in the country. Very important investments have been made, such as the completion of highway paving works, the expansion of port operating capacity and the genetic improvement of new varieties with high productive potential and more adapted to the climatic conditions of the cerrado. Large agribusinesses began to look at the state of Mato Grosso as a new hub for expansion and transformation and decided to settle in the region.

All these movements further boosted the new design of corn production in Brazil. To give you an idea, corn production in Mato Grosso in the 2009/2010 harvest was 8,7 million tons, the number practically multiplied by five in the current harvest. The manufacture of corn ethanol in the state, according to Conab forecasts, should generate 2,98 billion liters, which will be sold nationally and internationally, placing the country as one of the main biofuel producers in the world.

This strength is due to an unparalleled combination of sustainable agricultural development, job and income generation, increased tax collection for municipalities and the state, and the production of a fuel with a very low carbon footprint.

For all these reasons, the new design in corn production, which generates increasingly greater agricultural efficiency, should continue to drive the construction of ethanol plants, in a virtuous circle that feeds back on itself. The estimate is that the sector will produce 8 billion liters of corn ethanol in 2027/2028, according to the National Corn Ethanol Union (Unem) and the National Petroleum Agency (ANP). In this promising horizon, we will have more investments in genetics, logistics (road and rail and warehouses), machinery, professional qualification and, above all, sustainable productive expansion.

Fabrício Vieira, commercial director of Ethanol and Energy at FS