Foreign Competition May Lower Gas Prices
These fields may soon threaten Missouri farmers because Brazil is the leading ethanol producer in the world.
Right now, when a foreign country exports a gallon of gas containing ethanol, a 54-cent tariff is charged in addition to whatever the country charges. So, that adds up to a lot of money to export any significant amount of ethanol to the U.S. The Bush administration wants to lower that tariff, and possibly even eliminate it to lower prices at the pump.
"It would completely devastate ethanol production in the U.S.," explained Brazilian agricultural economist Dante Pozzi. "There's no way they can be more competitive. Sugar cane is more competitive than corn."
But, not everyone agrees. Mid-Missouri ethanol producers insist domestic production is increasing quickly enough to meet demand without help from abroad.
"I don't see it as any threat at all," said Steve Burnette of Northeast Missouri Grain, LLC., "especially this far inland."
Getting foreign ethanol to Missouri is not easy because it must first come by tanker ship, then transferred to a tanker barge to go upriver. Trucks drive it across the Midwest, going through terminals along the way.
It would take several years before Missouri farmers know if foreign ethanol affected their markets.