Archer Daniels Midland invests in Brazilian sugarcane ethanol

In Illinois, Archer Daniels Midland said it will invest, via joint venture, in two new sugarcane ethanol mills in Goias state in Brazil. Brazilian newspaper Valor Economico said that the plants would have a combined capacity of up to 8 million tonnes of sugar cane annually, and would commence operation in 2010.

Archer Daniels Midland background

Archer Daniels Midland, Monsanto, DuPont and John Deere have united with a group of agrienergy companies to form the Alliance for Abundant Food and Energy to lobby for continued government subsidies for ethanol.  “There are critics who are trying to create an either-or decision between food and fuel,” executive director Mark Kornblau told the Wall Street Journal.  the alliance’s executive director. “We believe this is a false choice.” The group will advocate that agricultural innovation will increase yields enough to produce food and fuel from biomass. Kornblau said the Alliance’s “initial budget is in the multimillions.”

In March, energy analysts at Piper Jaffray raised the possibility of a looming ethanol shakeout, as Friedman, Billings, Ramsey & Co projected an increase in corn prices from $3.75 to $5.00 per bushel. Analysts suggested that the ethanol squeeze could be felt for two years while the industry installs ethanol pipelines to bring the product to the Southwest. Reports circulated that Archer Daniels Midland would not step into the market and snatch up the smaller players, hoping that liquidations would ease the pressure on corn prices and ethanol margins.

In January, Archer Daniels Midland said that it will initiate an $84 million project that buries (sequesters), carbon dioxide emissions. The technique, which is not yet proven to be a stable solution for reducing CO2 emissions, prevents CO2 emissions from entering the atmosphere., The project is being carried out in partnership with the Midwest Geological Sequestration Consortium and the Illinois State Geological Survey on the project. The U.S. Department of Energy is providing $66.7 million in support, with the remainder being provided by ADM among others.

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