Commodity Price Volatility in the Biofuel Era: An Examination of the Linkage between Energy and Agricultural Markets

Thomas Hertel and Jayson Beckman

GTAP Working Papers from Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University

Abstract: Agricultural and energy commodity prices have traditionally exhibited relatively low - even negative correlation. However, the recent increases in biofuel production have altered the agriculture-energy relationship in a fundamental way. The amount of corn utilized for ethanol production in the US has increased from 5% in 2001 to over one-third by the end of the decade. This increase has drawn corn previously sold to other uses (exports, food, feed), as well as acreage devoted to other crops (e.g., oilseeds and other grains). In addition, there has been an increase in the demand for production inputs, especially fertilizers, which are heavily energy-intensive. In short, the previous "biofuel decade" has led to significant changes in the US, and indeed the global economy.

Date: 2010
New Economics Papers: this item is included in nep-ene
Note: GTAP Working Paper No. 60
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Citations: View citations in EconPapers (21)

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Related works:
Chapter: Commodity Price Volatility in the Biofuel Era: An Examination of the Linkage between Energy and Agricultural Markets (2011)
Working Paper: Commodity Price Volatility in the Biofuel Era: An Examination of the Linkage Between Energy and Agricultural Markets (2011)
Working Paper: Commodity Price Volatility in the Biofuel Era: An Examination of the Linkage between Energy and Agricultural Markets (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:gta:workpp:3214

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