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Challenges to Producer Ownership of Ethanol and Biodiesel Production Facilities

Author

Listed:
  • Kenkel, Phil
  • Holcomb, Rodney B.

Abstract

This study examines the rapidly expanding biofuels industry and identifies challenges for producer-owned biofuel projects. The U.S. ethanol industry has been growing rapidly, and biodiesel production is poised for similar growth. Producer involvement is driven by the desire to add value to farm commodities and the impact of biofuel projects on local grain prices. Local state and federal incentives have also stimulated producer interest. The long-run profitability of biofuel projects is driven by feedstock availability, access to market centers for biofuels, access to markets for coproducts, and utility costs and availability. The rapidly increasing size and scale of ethanol and biodiesel plants make it difficult for producers to fund these projects. Additionally, the development and adoption of new non-grain biofuel technologies may negate some comparative advantages of producers, such as feedstock cost and availability. The geographic expansion of biofuel projects into grain deficit regions will also create additional challenges.

Suggested Citation

  • Kenkel, Phil & Holcomb, Rodney B., 2006. "Challenges to Producer Ownership of Ethanol and Biodiesel Production Facilities," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 38(2), pages 369-375, August.
    • Handle: RePEc:cup:jagaec:v:38:y:2006:i:02:p:369-375_02
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    Citations

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    Cited by:

    1. Jason Fewell & Cole Gustafson, 2010. "Do lender‐imposed sweeps affect ethanol technology investment?," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 70(2), pages 169-183, August.
    2. Mônica A. Haddad & Gary Taylor & Francis Owusu, 2010. "Locational Choices of the Ethanol Industry in the Midwest Corn Belt," Economic Development Quarterly, , vol. 24(1), pages 74-86, February.
    3. Busby, David P. & Little, Randall D. & Shaik, Saleem & Martins, Angelina & Epplin, Francis M. & Hwang, Seonghuyk & Baldwin, Brian S. & Taliaferro, Charles M., 2007. "Yield and Production Costs for Three Potential Dedicated Energy Crops in Mississippi and Oklahoma Environments," 2007 Annual Meeting, February 4-7, 2007, Mobile, Alabama 34854, Southern Agricultural Economics Association.
    4. Ribera, Luis A. & Outlaw, Joe L. & Richardson, James W. & Silva, Jorge A. da & Bryant, Henry L., 2007. "Mitigating the Fuel and Feed Effects of Increased Ethanol Production Utilizing Sugarcane," Biofuels, Food and Feed Tradeoffs Conference, April 12-13, 2007, St, Louis, Missouri 313700, Farm Foundation.
    5. Lambert, D.M. & Wilcox, M. & English, A. & Stewart, L., 2008. "Ethanol Plant Location Determinants and County Comparative Advantage," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 40(1), pages 117-135, April.
    6. Lin, C.-Y. Cynthia & Yi, Fujin, 2012. "Ethanol Plant Investment in Canada: A Structural Model," Institute of Transportation Studies, Working Paper Series qt7vd043zr, Institute of Transportation Studies, UC Davis.
    7. Galinato, Suzette P. & Young, Douglas L. & Frear, Craig S. & Yoder, Jonathan K., 2011. "Will Washington Provide Its Own Crop Feedstocks for Biofuels?," Western Economics Forum, Western Agricultural Economics Association, vol. 10(01), pages 1-11.
    8. Busby, David P. & Philips, Andrew L. & Herndon, Cary W., Jr., 2008. "Construction Cost Sensitivity of a Lignocellulosic Ethanol Biorefinery," 2008 Annual Meeting, February 2-6, 2008, Dallas, Texas 6784, Southern Agricultural Economics Association.

    More about this item

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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