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PGHammer

join:2003-06-09
Accokeek, MD
reply to Ahrenl

Re: Dont Expect Change

Brazilian ethanol production is almost entirely government-underwritten; also, most of it is from sugar beets (and thus helps prop up sugar prices; Brazil is also a major source of such beets). While the US is also a sugar producer (from both sugar beets and cane), we grow *far* more corn and other grains (hence the use of grain in the US for ethanol production). Without the diversion of corn for ethanol, at-the-silo corn prices (especially for human consumption) have been at historic lows; farmers had actually been paid *not* to grow corn!
Actually, the United States is the specific reason why Brazil even *has* an ethanol industry; we pretty much killed the export market for Brazilian sugar stock (from both cane and beets) via our own trade policies (heavily weighted to favor both domestic production and Caribbean sources; NAFTA/CAFTA certainly didn't help matters any). With the largest export market for sugar stock closed off, what was Brazil to do?