Advanced Search
MyIDEAS: Login

The impact of US biofuel policies on agricultural price levels and volatility


Author Info

  • Bruce A. Babcock


Purpose – The purpose of this paper is to examine the market impacts of US biofuels and biofuel policies. Design/methodology/approach – Two methods of analysis are employed. The first method looks back in time and estimates what US crop prices would have been during the 2005 to 2009 marketing years under two scenarios. The second method of analysis is forward looking and examines the market impacts of the blender tax credit and mandate on the distribution of prices in the 2011 calendar and marketing year. Findings – The results developed in the previous two sections show that US ethanol policies modestly increased maize prices from 2006 to 2009 and that market impacts of the policies will be larger under tighter market conditions. Practical implications – More flexible US biofuel policy including removing the blenders tax credit, which does not help US biofuel industry as long as the mandates are in place, and relaxing blending mandates when feedstock supplies are low. Originality/value – This report makes three contributions to understanding the extent to which US biofuel policies contribute to higher agricultural and food prices. First, estimates of the impact of US ethanol policies on crop and food prices reveal that the impacts of the subsidies were quite modest. The second contribution is to provide estimates of the impact on agricultural commodity prices and food prices from market-driven expansion of ethanol. The final contribution of this report is improved insight into how current US biofuel policies are expected to affect crop prices in the near future. JEL classification: Q13 Q57 Q58

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL:
Download Restriction: Cannot be freely downloaded

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Emerald Group Publishing in its journal China Agricultural Economic Review.

Volume (Year): 4 (2012)
Issue (Month): 4 (November)
Pages: 407-426

as in new window
Handle: RePEc:eme:caerpp:v:4:y:2012:i:4:p:407-426

Contact details of provider:
Web page:

Order Information:
Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK

Related research

Keywords: Agricultural commodity price; Agriculture; Biofuel policies; Process; United States of America;

Find related papers by JEL classification:


No references listed on IDEAS
You can help add them by filling out this form.


Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Trujillo-Barrera, Andres & Mallory, Mindy L. & Garcia, Philip, 2012. "Volatility Spillovers in U.S. Crude Oil, Ethanol, and Corn Futures Markets," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 37(2), August.
  2. Timothy A. Wise, 2012. "The Cost to Mexico of U.S. Corn Ethanol Expansion," GDAE Working Papers 12-01, GDAE, Tufts University.
  3. Hochman, Gal & Kaplan, Scott & Zilberman, David, 2013. "The Causes of Recent Food Commodity Crises," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150423, Agricultural and Applied Economics Association.
  4. Emiliano Magrini & Ayca Donmez, 2013. "Agricultural Commodity Price Volatility and Its Macroeconomic Determinants: A GARCH-MIDAS Approach," JRC-IPTS Working Papers JRC84138, Institute for Prospective and Technological Studies, Joint Research Centre.


This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.


Access and download statistics


When requesting a correction, please mention this item's handle: RePEc:eme:caerpp:v:4:y:2012:i:4:p:407-426. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Virginia Chapman).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.