Probably my last trip to the farms in Brazil
Editor’s note: This is Part 2 of a two-part column.
Caroline Seibt and my son Mathew were married in Brazil in 2017. The Seibt family expanded their coffee production in Minas Gerais, Brazil, two to three years ago. It takes that long for new trees to grow to reach full production, so the farm reached its maximum production this year as coffee prices have surged. A coffee tree can last 25 years, but a small portion of a farm’s trees are typically replaced each year. They had cleared a few acres, were liming the ground and would plant soybeans one crop before replanting it again to coffee.
So, they have trees in all stages, some young to old. They must irrigate to keep the trees alive during the dry season. The trees are often planted in a circular manner to facilitate drip irrigation. That also facilitates mechanical harvesting. They were just completing their coffee harvest when we were there.
They fertilize the coffee with dairy manure and use coffee hulls for bedding for cows. They dry the coffee naturally spread on a tarmac using the sun (it is the dry season so no rain) and do initial processing on the farm. The coffee farm employs about 40 workers with 120 full-time workers and 500 at peak seasonal hiring for the farms overall.
One nuance of their coffee operation is that Matthew and Carol import the farm’s specialty coffee into the U.S. Coffee is graded for quality and must get a score of 80 to be labeled as a specialty coffee, which of course adds value. Gaucha Specialty Coffee has a score of 88. Sustainability is very important to market Brazilian coffee in the world. Gaucha farms coffee has been certified by three such entities … Cafe Practices (Starbucks), Rainforest and Nescafe. They sell green beans to roasters.
Another nuance is that if a U.S. roaster wants to purchase their coffee, it is already in the U.S., previously shipped to and stored in cold storage in Indiana for distribution to buyers. Having a coffee supply pre-positioned here in the states makes them unique among Brazilian coffee farms. About 30% of the farm’s production could reach specialty grade, and they are at 10% specialty sales now so have room to grow U.S. direct sales. The rest of their coffee goes to a COOP which also sells to the U.S., so they essentially compete with their COOP with both having booths at International Coffee Shows.
Here are some fun numbers: They believe that they will harvest 24,000 sacks of coffee this year, each weighing 136 pounds. At 30 8-ounce cups of coffee per pound of green beans, that means that they will produce almost 98,000,000 cups of coffee off their farm. At an average U.S. per capita consumption of 2.5 cups per day, that is enough coffee for 39.2 million Americans for a day.
What else did I see new in Brazil? Lots of Eucalyptus. These trees grow to be harvested as fuel every five to seven years, producing three harvests before needing replanted. They have a paper-making plant there, but everything from soybean crush plants to ethanol plants are fueled by this wood. This gives Brazilian ethanol a lower carbon score than ours. They make ethanol there from sugar cane and corn. Sugar cane leaves are burned as biomass to fuel those ethanol plants. Eucalyptus is burned to power corn ethanol plants. This lowers their carbon score enough for Brazilian ethanol to qualify as a feedstock for SAF production and attracts larger export demand from buyers for which the carbon score is important.
That is why the U.S. ethanol industry is trying to utilize CO2 sequestration to reduce its carbon score to be competitive with Brazilian ethanol producers. This is part of this global perspective that many U.S. farmers that oppose CO2 pipelines lack.
Tallgrass Energy Partners in Nebraska is leading the U.S. ethanol industry in CO2 sequestration and it is why our family sold Summit Carbon Solutions an easement for a CO2 pipeline. CO2 sequestration, resulting in accompanying reduction in ethanol carbon score, would add hundreds of millions of bushels to U.S. corn demand. Too many would rather do nothing and take another USDA ACH instead.
One of our Brazilian drivers pulled into a gas station to fill with fuel. He chose “gasolina” over ethanol. “Gasolina” there was about a dollar per gallon more expensive than an equivalent fuel here in Iowa. Remember their vehicles are half the size of ours, so they use less fuel per mile. Our driver said that ethanol got poor mileage. Before you come to any misconceptions, what Brazilians call “gasoline” contains 30% ethanol while their “ethanol” is 96% ethanol, with just enough additive so that it is not moonshine.
He could choose between what our equivalent fuel would be E-30 and E-85. E-30 is my blend and we are still fighting over year-around E-15. Our ideology and misinformation keep us at a disadvantage over carbon scores with Brazil, and the political clout of our petroleum industry keeps us at a disadvantage limiting U.S. ethanol demand. Our new answer to Brazilian competition appears to be to tariff them despite their having a trade deficit with the U.S. You know the things that they were most unhappy with us about? …Trump meddling by failing to approve visas for some FIFA World Cup soccer participants and with the FIFA player eligibility rules. Brazilians’ soccer fanaticism has not changed.