The Impact of Increased Ethanol Production on Corn Basis in South Dakota

Andrea Olson, Nicole L. Klein and Gary Taylor

No 10255, 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon from Western Agricultural Economics Association

Abstract: A basis model is used to empirically estimate the impact of ethanol production on the South Dakota corn basis on the district and "State" levels. Monthly data is used to estimate basis as a function of futures price, supply, demand, storage, and transportation costs. The independent variables used are corn futures prices, corn production, corn usage for ethanol production, corn usage by cattle, Midwest No. 2 Diesel retail sales prices, storage availability, and unit train transportation The regression results show the impact on corn basis varies by district from $0.04 to $0.27 per bushel, with a "State" impact of $0.24 in 2005. The impact from an additional 40 million gallon per year (MGY) ethanol plant ranges from $0.06 to $0.16 per bushel, with a "State" impact of $0.03. The impact from an additional 100 MGY ethanol plant ranges from $0.16 to $0.40 per bushel, with a "State" impact of $0.08.

Keywords: Crop; Production/Industries (search for similar items in EconPapers)
Pages: 40
Date: 2007
References: View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:waeapo:10255

DOI: 10.22004/ag.econ.10255

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