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

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Author Info
Simla Tokgoz
Amani Elobeid
Jacinto Fabiosa
Dermot J. Hayes
Bruce A. Babcock
Tun-Hsiang (Edward) Yu
Fengxia Dong
Chad E. Hart

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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 Agricultural and Applied Economics Association

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Publisher Info
Article provided by American Agricultural Economics Association in its journal Review of Agricultural Economics.

Volume (Year): 30 (2008)
Issue (Month): 4 (December)
Pages: 604-622
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Handle: RePEc:bla:ragrec:v:30:y:2008:i:4:p:604-622

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=1058-7195

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  1. Dermot J. Hayes & Bruce A. Babcock & Jacinto F. Fabiosa & Simla Tokgoz & Amani Elobeid & Tun-Hsiang (Edward) Yu & Fengxia Dong & Chad E. Hart & Eddie Chavez & Suwen Pan & Miguel Carriquiry & Jerome Du, 2009. "Biofuels: Potential Production Capacity, Effects on Grain and Livestock Sectors, and Implications for Food Prices and Consumers," Food and Agricultural Policy Research Institute (FAPRI) Publications 09-wp487, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University. [Downloadable!]
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