b'S T R A T E G Yethanol.United States a run for their Diversifying seems like amoney in terms of ethanol no-brainer to us, Zuckerbergproduction. says.Demand for ethanol is However, both Zuckerbergbeginning to be torn into com-and Taheripour note thatpetition between the United theres one place the industryStates and Brazil, Taheripour could benefit: a higher blendsays. of ethanol in gasoline.Traditionally, Taheripour Traditionally in the Unitednotes that Brazils ethanol States, we try to use a 10%production comes from sugar-blend of ethanol in gasoline,cane. However, more recently, Taheripour says. So, withthat is beginning to change.that tradition, if the market forBrazilian farmers are now gasoline grows in the future,producing more and more of course we can have morecorn in combination withBrazils ability to be morefuture is commodity prices.demand for ethanol. soybeans, due to the benefitcost competitive is challengingWouldnt you know it, However, Taheripour notesof a double cropping system,the United States long-termChina is actually buying corn, that doesnt seem to be thehe says. This means that eachaspirations to increase ethanolsoybean and sorghum, and current case in terms of etha- year, theyre able to use theirexports, he says. in the last few months, weve nol demand.land twice: once for corn, andAccording to Zuckerbergsseen a big pick up in corn, Existing evidence is show- once for soybeans. report, in 2019, world ethanolsoybean and sorghum prices, ing that demand for gasolineWith this new technology,production totaled 29.1 billionZuckerberg says. Corn is a will not grow significantly, hethat means Brazil is rapidlygallons, with the United Statesfeedstock for ethanol, and says. As a result, if we wantedincreasing its production of corn. and Brazil accounting for 84%higher corn prices are a to just stay with the 10% blend,Traditionally, Brazil isntof production. Brazil, however,welcome to the U.S. farmer. this means that the demanda large producer of corn,has been growing produc- However, that requires higher for ethanol will fall. Taheripour says. But theyretion faster than the Unitedprices from ethanol producers.Zuckerberg echoes thisgoing to become a largerStates over the past five years,Zuckerberg says to think sentiment.corn producer, and soon, anaveraging about 5.2% vs theof a pizzeriaif the cost of If states approve a higherimportant market for BrazilianUnited States 2.0%.cheese and flour go up, what blend rate of ethanol, thats acorn would be corn ethanolThe result is an incremen- will happen if you dont adjust demand driver, he says.production.tal increase in market shareyour prices? Youll go out of Higher blending rates forBrazil has been a No. 2for Brazil and decrease forbusiness.ethanoleither 15% or 20% producer of ethanol fuel,the United States during thisFarmer margins are low would generate more demandZuckerberg says. When youperiod, he says.and thats good, but if corn for ethanol, which would makethink of whos selling what toAll-in-all, Zuckerberg saysstays high, well have to see sure we secure a demand forChina, thats one of the coun- its time to watch. ethanol fuel prices go up, he corn ethanol, Taheripour says.tries weve got on our brain.Whether or not Brazil willsays. We are hugely focused While Brazil still importsovertake us as Chinas moston whats happening with corn Brazils LoomingU.S. ethanol, Zuckerbergimportant ethanol exporter isprices, and how that will affect Competition notes that it could become aimperative to know for the U.S.the future of ethanol prices as Another long-term factorformidable export competitorethanol industry, he says. well. SWalso looms in the distanceabecause of its trade access toThe final part Zuckerberg competitor who could give theChina.notes to watch in ethanols ENDORSED BY 114/ SEEDWORLD.COMDECEMBER 2020'