Brazil’s ethanol boom keeps more corn at home

Brazil is consuming a lot more corn at home and will be less of a force in the export market in the years to come, says an analyst.

“That would ease some of the competition with U.S. corn exports and could push global prices higher,” said Joana Colussi, research and learning innovation co-ordinator with the University of Illinois’s department of agriculture.

Canada’s barley growers would also benefit from rising global corn prices, since the two crops are closely linked.

Brazil is the world’s second largest corn exporter behind the United States, so it has a significant influence on global prices.

Corn ethanol production is on the rise in Brazil, reaching an estimated 8.25 billion litres in 2024-25, up from just 140 million litres a decade ago.

The country has 25 corn ethanol plants and another 15 under construction.

Production is expected to expand to 10 billion litres in 2025-26, accounting for about one-third of the country’s total ethanol production. Sugarcane ethanol makes up the remainder.

“A major driver of this growth is expansion of second crop corn, primarily planted in the central-west region,” Colussi said during a recent video produced by the university.

Brazil’s second crop now accounts for 80 per cent of its total production.

The South American country used 722 million bushels of corn for ethanol production in 2024-25, up from 16 million bushels 10 years ago.

The ethanol industry now consumes 15 percent of Brazil’s total corn production, up from 0.6 percent a decade ago.

Brazil’s livestock sector is another big user of corn. It is the world’s second largest poultry producer.

The livestock sector consumes 2.5 billion bu. of corn per year, while another 925 million bushels goes to food, seed and industrial purposes, which includes ethanol.

“Over the past decade, Brazil’s domestic corn consumption has jumped by 53 per cent,” said Colussi.

“With strong domestic demand, it’s likely we’ll see a reduction in Brazil’s corn exports in the coming years.”

Rich Nelson, chief strategist with Allendale Inc., said he “lightly agrees” with that statement.

“We can probably expect their soybean exports to still show continuous increases for at least three more years,” he said.

“But I think on the corn end, you could argue that maybe this would be a move that would stabilize their export numbers,” he said.

That should help U.S. corn exporters, who have lost considerable market share to Brazil over the past couple of decades.

Brazil has gone from exporting no corn before the turn of the century to shipping an estimated 44 million tonnes in 2024-25.

That total is quite a bit below the record 54 million tonnes exported in 2022-23 due to a much-improved U.S. crop and slumping Chinese demand.

Local corn prices in Brazil are at their highest level since 2022 when the Russia-Ukraine war began.

Prices averaged US$6.57 per bu. in March, said Colussi.

Nelson said Brazil’s high domestic price and the recent weakening of the U.S. dollar compared to the Brazilian real is giving the U.S. “life support” in the corn market for the short-term.

If Colussi turns out to be correct and Brazil’s exports shrink in the years to come, that will give the U.S. life support in the long-term as well.

Tags: Production, ethanol, Market, livestock sector, corn, export, Brazil