by Marcos Fava Neves
In recent years, global grain production has surged across multiple continents, fostering economic growth and social inclusion. For instance, world corn production increased from 1.05 billion to 1.29 billion tons, an impressive addition of 235 million tons to the market. Similarly, global soybean output climbed from 316 million to 426 million tons, adding 110 million tons.
However, this remarkable rise in production has led to lower prices, thinner margins and even negative returns for farmers around the world. The resulting financial crisis has hit the U.S. corn and soybean belt, the Brazilian Cerrado, China, Argentina, and other major grain-producing regions, threatening the economic sustainability of farming.
These challenges are compounded by existing struggles with climate variability, pests and diseases, storage and transportation bottlenecks, and difficulties in financing — since farming is essentially an open-air factory.
Unintended consequences
On the other hand, over the past 30 years, we have witnessed the economic, environmental and social benefits of replacing fossil fuels with biofuels — mainly ethanol from sugarcane, corn and sugarbeet, as well as biodiesel and renewable diesel derived from soybeans and other sources.
Biofuels have contributed to increased farm income, spurred rural development, boosted exports and reduced imports. They have helped countries enhance energy security and lower carbon emissions. They have also created new markets for industry, generated income for rural and urban workers, promoted investment, and provided governments with tax revenues to fund social development.
Countries like China, the U.S., Brazil, Argentina, and others across Asia, Africa, Europe and Oceania have demonstrated the resilience and widespread benefits of this approach.
Looking ahead, the prospects for the biofuel industry are bright. There is a growing global demand for renewable jet fuels, marine fuels and other new-generation fuels, prompting agriculture and other industries to invest in solutions that reduce fossil fuel dependence and address society’s environmental concerns. While these investments are underway and will yield long-term benefits, most will not address the current oversupply crisis in the immediate future.
To support farmers worldwide in the short term, governments could increase the blending mandates of ethanol in gasoline and biodiesel (or renewable diesel) in fossil diesel.
A blending solution
A key step would be for the U.S. to gradually move from the current E10 blend (10% ethanol in gasoline) to an E15 blend, especially as gasoline consumption declines thanks to electric vehicles, more efficient engines and changing consumer behaviors. Such a policy adjustment, which could be championed by President Donald Trump, would provide much-needed support for Midwest farmers during these challenging times.
Brazil could follow this lead by increasing its ethanol blend from E30 to E35, thus expanding markets for its sugarcane sector and rapidly growing corn ethanol industry. Notably, Brazil is already raising its biodiesel blend mandate by 1% each year and raised ethanol blending from E27 to E30 on Aug. 1.
China also has an opportunity to raise its mandates by using more domestically produced — and imported—ethanol and biodiesel, including imports from the U.S. This move would not only benefit trade relations and job creation but also stimulate rural development in both nations. Other countries could embrace the biofuel initiative as well, generating new opportunities and incentives for farmers in the years ahead.
An added benefit of expanding biofuel production is the increased availability of valuable byproducts, such as soybean starch (from soybean processing) and corn distillers dried grains, which are used as animal feed for meat production — especially pork, chicken and beef. This greater supply can enhance the competitiveness of meat production in China, U.S. and Brazil, and may also lead to increased DDG exports to China, supporting its meat industry and benefiting end consumers through more competitive prices.
As the 2025 United Nations Climate Change Conference convenes this week in Belém, Brazil, expanding biofuel blends could offer a timely solution to the current agricultural crisis and serve as a welcome gesture toward both economic development and environmental progress. The world clearly needs fewer fossil fuels and more renewable, green alternatives.
Fava Neves is an international expert on global food, agribusiness and bioenergy strategies. He is a professor at the University of São Paulo and the Harven Agribusiness School in Brazil, and a visiting professor at Purdue University. Email him at favaneves@gmail.com.