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The Impacts of Biofuel Policies on Spatial and Vertical Price Relationships in the US Fertilizer Industry

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  • Anton Bekkerman
  • Thomas Gumbley
  • Gary W. Brester

Abstract

Biofuel policies and concomitant market forces in the mid‐2000s systemically altered US corn markets. Because corn production requires large nitrogen fertilizer inputs, those policies may have also impacted US fertilizer markets. We model fertilizer price relationships across US regions and leverage the natural experiment of biofuel policy intervention to show the secondary impacts on fertilizer markets. Long‐run fertilizer price adjustments became faster and short‐run price dynamics became more responsive to corn markets and less affected by natural gas prices. Additionally, regions where corn production significantly increased after the policies had a 10–20% increase in influencing the fertilizer price discovery process.

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  • Anton Bekkerman & Thomas Gumbley & Gary W. Brester, 2021. "The Impacts of Biofuel Policies on Spatial and Vertical Price Relationships in the US Fertilizer Industry," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 43(2), pages 802-822, June.
    • Handle: RePEc:wly:apecpp:v:43:y:2021:i:2:p:802-822
    DOI: 10.1002/aepp.13038
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    Cited by:

    1. Hu, Zhepeng & Huang, Joshua & Yan, Lei & Yuan, Jinghong, 2023. "Deconstructing Urea Fertilizer Price Spikes: The Role of Supply-Demand, Speculation, and Energy Prices," 2023 Annual Meeting, July 23-25, Washington D.C. 335529, Agricultural and Applied Economics Association.

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