IDEAS home Printed from https://ideas.repec.org/p/ags/aaea09/49309.html
   My bibliography  Save this paper

The Spatial Effect of Ethanol Biorefinery Locations on Local Corn Prices

Author

Listed:
  • Katchova, Ani L.

Abstract

This study examines whether the local competition for corn to produce ethanol has lead to significantly higher prices for farmers located close to ethanol plants. If any, such price premiums for spatial closeness would be in addition to the general level of corn price changes experienced by farmers throughout the U.S. The difference-in-differences estimation method is used to account for both time and location differences in order to measure the interaction of time and location effects. Using the USDA’s ARMS data, the results show that while prices in real terms have risen over time, farmers located close to ethanol plants have not received significantly higher prices than farmers living farther away from plants. These findings indicate that there is a lack of evidence for price premiums due to the spatial closeness to ethanol plants.

Suggested Citation

  • Katchova, Ani L., 2009. "The Spatial Effect of Ethanol Biorefinery Locations on Local Corn Prices," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49309, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea09:49309
    DOI: 10.22004/ag.econ.49309
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/49309/files/Ethanol%20AAEA%20paper.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.49309?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Paul Gallagher & Robert Wisner & Heather Brubacker, 2005. "Price Relationships in Processors' Input Market Areas: Testing Theories for Corn Prices Near Ethanol Plants," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 53(2‐3), pages 117-139, June.
    2. Gallagher, Paul W. & Wisner, Robert N. & Brubaker, Heather, 2005. "Pricing Relationships in Processors' Input Market Areas: Testing Theories for Corn Prices Near Ethanol Plants," Staff General Research Papers Archive 12305, Iowa State University, Department of Economics.
    3. Ani L. Katchova & Mario J. Miranda, 2004. "Two-Step Econometric Estimation of Farm Characteristics Affecting Marketing Contract Decisions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 88-102.
    4. Park, Hwanil & Fortenbery, T. Randall, 2007. "The Effect of Ethanol Production on the U.S. National Corn Price," 2007 Conference, April 16-17, 2007, Chicago, Illinois 37565, NCCC-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    5. Eathington, Liesl & Swenson, David A., 2007. "Dude, Where's My Corn? Constraints on the Location of Ethanol Production in the Corn Belt," Staff General Research Papers Archive 12777, Iowa State University, Department of Economics.
    6. Sarah A. Low & Andrew M. Isserman, 2009. "Ethanol and the Local Economy," Economic Development Quarterly, , vol. 23(1), pages 71-88, February.
    7. Ani L. Katchova & Mario J. Miranda, 2004. "Two-Step Econometric Estimation of Farm Characteristics Affecting Marketing Contract Decisions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 88-102.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Gaurav Arora & Peter T. Wolter & Hongli Feng & David A. Hennessy, 2016. "Role of Ethanol Plants in Dakotas Land Use Change: Incorporating Flexible Trends in the Difference-in-Difference Framework with Remotely-Sensed Data," Center for Agricultural and Rural Development (CARD) Publications 16-wp564, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    2. Liu, Bing & Hudson, Darren & Farmer, Michael, 2015. "The Impact of a Sorghum-Based Ethanol Plant on Local Cotton Acreage: A Spatial Approach," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 229799, Southern Agricultural Economics Association.
    3. Arora, Gaurav & Wolter, Peter T. & Feng, Hongli & Hennessy, David A., 2015. "Role of Ethanol Plants in Dakotas’ Land Use Change: Analysis Using Remotely Sensed Data," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205877, Agricultural and Applied Economics Association.
    4. Ben H. Blomendahl & Richard K. Perrin & Bruce B. Johnson, 2011. "The Impact of Ethanol Plants on Surrounding Farmland Values: A Case Study," Land Economics, University of Wisconsin Press, vol. 87(2), pages 223-232.
    5. Stevens, Andrew, 2015. "Fueling Local Water Pollution: Ethanol Refineries, Land Use, and Nitrate Runoff," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205741, Agricultural and Applied Economics Association.
    6. Stevens, Andrew W., 2021. "Ethanol Refineries and Local Land Use," 2021 Conference, August 17-31, 2021, Virtual 315304, International Association of Agricultural Economists.
    7. Ani L. Katchova & Ana Claudia Sant’Anna, 2019. "Impact of Ethanol Plant Location on Corn Revenues for U.S. Farmers," Sustainability, MDPI, vol. 11(22), pages 1-13, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Katchova, Ani L., 2011. "Are Local Corn Prices Affected by the Location of Ethanol Biorefineries?," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114769, European Association of Agricultural Economists.
    2. Ani L. Katchova & Ana Claudia Sant’Anna, 2019. "Impact of Ethanol Plant Location on Corn Revenues for U.S. Farmers," Sustainability, MDPI, vol. 11(22), pages 1-13, November.
    3. John L. Pender & Jeremy G. Weber & Jason P. Brown, 2014. "Sustainable Rural Development and Wealth Creation," Economic Development Quarterly, , vol. 28(1), pages 73-86, February.
    4. Katchova, Ani L., 2010. "Agricultural Contracts and Alternative Marketing Options: A Matching Analysis," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 42(2), pages 1-16, May.
    5. Evan J. Miller-Tait & Sandeep Mohapatra & M. K. (Marty) Luckert & Brent M. Swallow, 2019. "Processing technologies for undervalued grains in rural India: on target to help the poor?," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 11(1), pages 151-166, February.
    6. repec:osf:socarx:jnexr_v1 is not listed on IDEAS
    7. Jordaan, Henry & Grove, Bennie, 2007. "Factors Affecting Maize Producers Adoption of Forward Pricing in Price Risk Management: The Case of Vaalharts," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 46(4), pages 1-18, December.
    8. Aymeric Ricome & Arnaud Reynaud, 2022. "Marketing contract choices in agriculture: The role of price expectation and price risk management," Agricultural Economics, International Association of Agricultural Economists, vol. 53(1), pages 170-186, January.
    9. Granoszewski, Karol & Spiller, Achim, 2013. "Langfristige Rohstoffsicherung in der Supply Chain Biogas: Status Quo und Potenziale vertraglicher Zusammenarbeit," Department of Agricultural and Rural Development (DARE) Discussion Papers 260820, Georg-August-Universitaet Goettingen, Department of Agricultural Economics and Rural Development (DARE).
    10. Kuzmanic, Danilo & Valenzuela, Juan Pablo & Claro, Susana & Canales, Andrea & Cerda, Daniela & Undurraga, Eduardo A., 2023. "Socioeconomic disparities in the reopening of schools during the pandemic in Chile," International Journal of Educational Development, Elsevier, vol. 100(C).
    11. Jordaan, Henry & Grove, Bennie, 2008. "Factors affecting the use of forward pricing methods in price risk management with special reference to the influence of risk aversion," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 47(01), pages 1-14, March.
    12. Todd H. Kuethe & Mitch Morehart, 2012. "The profit impacts of risk management tool adoption," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 72(1), pages 104-116, May.
    13. I. Kiyingi & A. Edriss & M. Phiri & M. Buyinza & H. Agaba, 2016. "Adoption of On-Farm Plantation Forestry by Smallholder Farmers in Uganda," Journal of Sustainable Development, Canadian Center of Science and Education, vol. 9(2), pages 153-153, January.
    14. Jason Wood & James Nolan, 2021. "Plant location decisions in the ethanol industry: a dynamic and spatial analysis," Computational Economics, Springer;Society for Computational Economics, vol. 58(1), pages 103-132, June.
    15. Rebecca N. L. Kiwanuka & Charles Machethe, 2016. "Determinants of Smallholder Farmers’ Participation in Zambian Dairy Sector’s Interlocked Contractual Arrangements," Journal of Sustainable Development, Canadian Center of Science and Education, vol. 9(2), pages 230-230, January.
    16. Li, Xiaokang & Guo, Hongdong & Li, Lin, 2016. "Contract Farming in China: Perspectives of Smallholders in Vegetable Production," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235573, Agricultural and Applied Economics Association.
    17. Viet Hoang & Vinh Nguyen, 2023. "Determinants of small farmers' participation in contract farming in developing countries: A study in Vietnam," Agribusiness, John Wiley & Sons, Ltd., vol. 39(3), pages 836-853, July.
    18. van Niekerk, H.N. & Taljaard, P.R. & Grové, B. & de Waal, H.O., 2013. "PR - Factors Affecting Small Livestock Predation In The Western Cape Province Of South Africa," 19th Congress, Warsaw, Poland, 2013 345687, International Farm Management Association.
    19. Valentinov, Vladislav & Imami, Drini & Xhoxhi, Orjon, 2024. "Contract farming in transitional economies: A stakeholder theory perspective," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 27(4), pages 633-649.
    20. Bahta, Yonas Tesfamariam & Haile, Berhane Okubay, 2013. "Determinants Of Poverty Of Zoba Maekel Of Eritrea: A Household Level Analysis," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 1(2), pages 1-12, October.
    21. Kumar, Anjani & Roy, Devesh & Joshi, Pramod K. & Tripathi, Gaurav & Adhikari, Rajendra P., 2016. "Impact of Contract Farming on Profits and Yield of Smallholder Farms in Nepal: An Evidence from Lentil Cultivation," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235848, Agricultural and Applied Economics Association.

    More about this item

    Keywords

    ;
    ;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aaea09:49309. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.