Bottlenecks, Drought, and Oil Price Spikes: Impact on U.S. Ethanol and Agricultural Sectors

Simla Tokgoz, Amani Elobeid, Jacinto Fabiosa, Dermot Hayes, Bruce Babcock, Tun-hsiang Yu, Fengxia Dong and Chad Hart

Review of Agricultural Economics, 2008, vol. 30, issue 4, 604-622

Abstract: We project U.S. ethanol production and its impact on planted acreage, crop prices, livestock production, trade, and retail food costs. The projections are made using a multicommodity, multicountry, partial equilibrium model. Results indicate that expanded U.S. ethanol production will cause long-run crop prices to increase. In response to higher feed costs, livestock farmgate prices increase enough to cover the feed cost increases. If crude oil prices increase, the U.S. ethanol sector expands. Results of a 1988-type drought scenario combined with a large mandate for ethanol consumption show higher crop prices, a drop in livestock production, and higher food prices. Copyright 2008, Oxford University Press.

Date: 2008
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Journal Article: Bottlenecks, Drought, and Oil Price Spikes: Impact on U.S. Ethanol and Agricultural Sectors (2008)
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