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The Impact Of Biofuels Policy And Drought On The U.S. Grain And Livestock Markets

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  • DHOUBHADEL, SUNIL P.
  • AZZAM, AZZEDDINE M.
  • STOCKTON, MATTHEW C.

Abstract

This article examines the impact of the 2012 drought and the biofuels mandate on the U.S. grain and livestock markets and estimates the mandate waiver required to offset the impact on the corn price. The framework used is a stochastic equilibrium displacement model that integrates the beef, pork, and poultry markets with the corn, distillers’ grain, soybean, soymeal, and ethanol markets. The corn and beef markets are found to be the most vulnerable. A mandate waiver of approximately 23% is required to fully negate the impact of the drought on corn prices. The waiver is equivalent to a 13.7% reduction in ethanol consumption.

Suggested Citation

  • Dhoubhadel, Sunil P. & Azzam, Azzeddine M. & Stockton, Matthew C., 2015. "The Impact Of Biofuels Policy And Drought On The U.S. Grain And Livestock Markets," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 47(1), pages 77-103, February.
  • Handle: RePEc:cup:jagaec:v:47:y:2015:i:01:p:77-103_00
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    Cited by:

    1. Thompson, Wyatt & Johansson, Robert & Meyer, Seth & Whistance, Jarrett, 2018. "The US biofuel mandate as a substitute for carbon cap-and-trade," Energy Policy, Elsevier, vol. 113(C), pages 368-375.
    2. Liu, Xinran & Ge, Wei, 2018. "Who Benefits from the Export Tax Rebate Policy? Evidence from the Chinese Fishery Sector," Studies in Agricultural Economics, Research Institute for Agricultural Economics, vol. 120(2), August.

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