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Ethanol and sugarcane expansion in Brazil: what is fueling the ethanol industry?

Author

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  • Sant'Anna, Ana Claudia
  • Shanoyan, Aleksan
  • Bergtold, Jason Scott
  • Caldas, Marcellus M.
  • Granco, Gabriel

Abstract

This case study describes Brazilian ethanol industry and strategic issues faced by sugarcane farmers and processors as a result of recent industry expansion into the states of Goias and Mato Grosso do Sul. It provides detailed description of the ethanol supply chain in Brazil from field to market and discusses market drivers influencing the industry. Shaped by government regulations, market liberalization, globalization, and technological change, the Brazilian ethanol industry provides a rich context for learning and applying strategic analysis tools. The case is designed to be used in a graduate or undergraduate agribusiness management or strategic management course. The specific teaching objective for this case is to refine and reinforce students’ understanding of industry analysis and the effect of market drivers on competitive forces in an industry. Students will be expected to conduct an industry analysis and provide strategy recommendations to managers of ethanol plants and farmers. The case study incorporates all of the essential information for students to understand the underlying economics of the ethanol value chain and how the external forces shape strategic growth opportunities.

Suggested Citation

  • Sant'Anna, Ana Claudia & Shanoyan, Aleksan & Bergtold, Jason Scott & Caldas, Marcellus M. & Granco, Gabriel, 2016. "Ethanol and sugarcane expansion in Brazil: what is fueling the ethanol industry?," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 19(4), September.
    • Handle: RePEc:ags:ifaamr:264202
    DOI: 10.22004/ag.econ.264202
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    References listed on IDEAS

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    1. Amani Elobeid & Simla Tokgoz, 2008. "Removing Distortions in the U.S. Ethanol Market: What Does It Imply for the United States and Brazil?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(4), pages 918-932.
    2. Crago, Christine L. & Khanna, Madhu & Barton, Jason & Giuliani, Eduardo & Amaral, Weber, 2010. "Competitiveness of Brazilian sugarcane ethanol compared to US corn ethanol," Energy Policy, Elsevier, vol. 38(11), pages 7404-7415, November.
    3. de Freitas, Luciano Charlita & Kaneko, Shinji, 2012. "Is there a causal relation between ethanol innovation and the market characteristics of fuels in Brazil?," Ecological Economics, Elsevier, vol. 74(C), pages 161-168.
    4. Belik, Walter & Paulillo, Luiz Fernando & Vian, Carlos Eduardo de Freitas, 2012. "A Emergência dos Conselhos Setoriais na Agroindústria Brasileira: gênese de uma governança mais ampla?," Revista de Economia e Sociologia Rural (RESR), Sociedade Brasileira de Economia e Sociologia Rural, vol. 50(1), January.
    5. Anna, Petrenko, 2016. "Мaркування готової продукції як складова частина інформаційного забезпечення маркетингової діяльності підприємств овочепродуктового підкомплексу," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 2(1), March.
    6. Itf, 2008. "Biofuels: Linking Support to Performance," OECD/ITF Joint Transport Research Centre Discussion Papers 2008/7, OECD Publishing.
    7. Marcos Adami & Bernardo Friedrich Theodor Rudorff & Ramon Morais Freitas & Daniel Alves Aguiar & Luciana Miura Sugawara & Marcio Pupin Mello, 2012. "Remote Sensing Time Series to Evaluate Direct Land Use Change of Recent Expanded Sugarcane Crop in Brazil," Sustainability, MDPI, vol. 4(4), pages 1-12, April.
    8. Elobeid, Amani & Tokgoz, Simla, 2008. "AJAE Appendix for “Removing Distortions in the U.S. Ethanol Market: What Does It Imply for the United States and Brazil?”," American Journal of Agricultural Economics APPENDICES, Agricultural and Applied Economics Association, vol. 90(4), pages 1-30, February.
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    Cited by:

    1. Silva Manoel, Aviner Augusto & Moraes, Marcelo Botelho da Costa & Lopes Santos, David Ferreira & Fava Never, Marcos, 2018. "Determinants of corporate cash holdings in times of crisis: insights from Brazilian sugarcane industry private firms," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 21(2), March.
    2. Ani L. Katchova & Ana Claudia Sant’Anna, 2019. "Impact of Ethanol Plant Location on Corn Revenues for U.S. Farmers," Sustainability, MDPI, vol. 11(22), pages 1-13, November.
    3. Sant’Anna, Ana Claudia & Bergtold, Jason S. & Shanoyan, Aleksan & Caldas, Marcellus M. & Granco, Gabriel, 2022. "Biofuel feedstock contract attributes, substitutability and tradeoffs in sugarcane production for ethanol in the Brazilian Cerrado: A stated choice approach," Renewable Energy, Elsevier, vol. 185(C), pages 665-679.
    4. Maria Backhouse & Kristina Lorenzen, 2021. "Knowledge Production and Land Relations in the Bioeconomy. A Case Study on the Brazilian Sugar-Bioenergy Sector," Sustainability, MDPI, vol. 13(8), pages 1-16, April.
    5. Niranjan Devkota & Alika Kumari & Sahadeb Upretee & Devid Kumar Basyal & Surendra Mahato & Deependra Karki & Udaya Raj Paudel & Seeprata Parajuli & Krishna Dhakal, 2023. "Farmers’ Perspectives on Sugarcane Management in Nepal: Empirical Evidence from Logistic Regression Model," Journal of Agriculture and Crops, Academic Research Publishing Group, vol. 9(2), pages 222-232, 04-2023.
    6. Wallysson Klebson Medeiros Silva & Graziela Pinto Freitas & Luiz Moreira Coelho Junior & Pablo Aurélio Lacerda Almeida Pinto & Raphael Abrahão, 2019. "Effects of climate change on sugarcane production in the state of Paraíba (Brazil): a panel data approach (1990–2015)," Climatic Change, Springer, vol. 154(1), pages 195-209, May.
    7. Sant'Anna, Ana Claudia & Bergtold, Jason & Shanoyan, Aleksan & Caldas, Marcellus & Granco, Gabriel, 2021. "Deal or No Deal? Analysis of Bioenergy Feedstock Contract Choice with Multiple Opt-out Options and Contract Attribute Substitutability," 2021 Conference, August 17-31, 2021, Virtual 315289, International Association of Agricultural Economists.
    8. Harahap, Fumi & Silveira, Semida & Khatiwada, Dilip, 2019. "Cost competitiveness of palm oil biodiesel production in Indonesia," Energy, Elsevier, vol. 170(C), pages 62-72.
    9. Ana Claudia Sant'Anna & Jason S. Bergtold & Aleksan Shanoyan & Gabriel Granco & Marcellus M. Caldas, 2018. "Examining the relationship between vertical coordination strategies and technical efficiency: Evidence from the Brazilian ethanol industry," Agribusiness, John Wiley & Sons, Ltd., vol. 34(4), pages 793-812, October.

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