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Food before Biodiesel Fuel?

Author

Listed:
  • Hao, Na
  • Colson, Gregory
  • Karali, Berna
  • Wetzstein, Michael E.

Abstract

Biodiesel has recently drawn attention because of its potential to make an important contribution to national energy security and the environment. However, the rapid growth of biodiesel has raised concerns about biodiesel’s impact on the price level and volatility of agricultural commodities. To address these concerns this research investigates the short- and long-run relationships between agricultural commodity and fuel markets, and finds interdependencies between the two. The causal linkage between biodiesel and soybean prices is very weak, indicating little likelihood of biodiesel triggering another food crisis. In contrast, oil price shocks have major influence on both fuel and agricultural commodity prices.

Suggested Citation

  • Hao, Na & Colson, Gregory & Karali, Berna & Wetzstein, Michael E., 2013. "Food before Biodiesel Fuel?," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida 143078, Southern Agricultural Economics Association.
  • Handle: RePEc:ags:saea13:143078
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    File URL: http://purl.umn.edu/143078
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    References listed on IDEAS

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    1. Gal Hochman & Scott Kaplan & Deepak Rajagopal & David Zilberman, 2012. "Biofuel and Food-Commodity Prices," Agriculture, MDPI, Open Access Journal, vol. 2(3), pages 1-10, September.
    2. Ciaian, Pavel & Kancs, d'Artis, 2011. "Interdependencies in the energy-bioenergy-food price systems: A cointegration analysis," Resource and Energy Economics, Elsevier, vol. 33(1), pages 326-348, January.
    3. David Zilberman & Gal Hochman & Deepak Rajagopal & Steve Sexton & Govinda Timilsina, 2013. "The Impact of Biofuels on Commodity Food Prices: Assessment of Findings," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(2), pages 275-281.
    4. McPhail, Lihong Lu & Du, Xiaodong & Muhammad, Andrew, 2012. "Disentangling Corn Price Volatility: The Role of Global Demand, Speculation, and Energy," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 44(03), August.
    5. Stefan Busse & Bernhard Brümmer & Rico Ihle, 2012. "Price formation in the German biodiesel supply chain: a Markov-switching vector error-correction modeling approach," Agricultural Economics, International Association of Agricultural Economists, vol. 43(5), pages 545-560, September.
    6. Kristoufek, Ladislav & Janda, Karel & Zilberman, David, 2012. "Correlations between biofuels and related commodities before and during the food crisis: A taxonomy perspective," Energy Economics, Elsevier, vol. 34(5), pages 1380-1391.
    7. McPhail, Lihong Lu, 2011. "Assessing the impact of US ethanol on fossil fuel markets: A structural VAR approach," Energy Economics, Elsevier, vol. 33(6), pages 1177-1185.
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    Cited by:

    1. David E. Allen & Chialin Chang & Michael McAleer & Abhay K Singh, 2018. "A cointegration analysis of agricultural, energy and bio-fuel spot, and futures prices," Applied Economics, Taylor & Francis Journals, vol. 50(7), pages 804-823, February.
    2. Mohcine Bakhat & Klaas WŸrzburg, 2013. "Price Relationships of Crude Oil and Food Commodities," Working Papers fa06-2013, Economics for Energy.

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