The Impact of Biofuels Policy and Drought on the U.S. Grain and Livestock Markets

Sunil P. Dhoubhadel, Azzedine M. Azzam and Matthew C. Stockton

Journal of Agricultural and Applied Economics, 2015, vol. 47, issue 01

Abstract: This article examines the impact of the 2012 drought and the biofuels mandate on the U.S. grain and livestock markets and estimates the mandate waiver required to offset the impact on the corn price. The framework used is a stochastic equilibrium displacement model that integrates the beef, pork, and poultry markets with the corn, distillers’ grain, soybean, soymeal, and ethanol markets. The corn and beef markets are found to be the most vulnerable. A mandate waiver of approximately 23% is required to fully negate the impact of the drought on corn prices. The waiver is equivalent to a 13.7% reduction in ethanol consumption.

Keywords: Livestock Production/Industries; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:ags:joaaec:348937

DOI: 10.22004/ag.econ.348937

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