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Effects of Recent Energy Price Reductions on U.S. Agriculture

Author

Listed:
  • Marshall, Kandice K.
  • Riche, Stephanie M.
  • Seeley, Ralph M.
  • Westcott, Paul C.

Abstract

Over the last half of 2014, energy prices fell sharply, with crude oil prices down more than 40 percent and natural gas prices down more than 20 percent. Further, energy prices are expected to remain lower than previously projected through at least 2016. The agricultural sector will benefit from lower energy prices primarily because of reduced production and transportation costs. Additionally, biofuel markets are potentially affected by lower energy prices, but the effect on the demand for ethanol is expected to be modest. Effects on individual commodities, therefore, reflect the importance of energy in production costs and whether the commodity is used as a biofuel feedstock, an input in the production of biofuel. Overall effects on acreage and agricultural commodity prices are anticipated to be modest. Farm-sector production expenses are reduced by about $5 billion annually for 2015 and 2016.

Suggested Citation

  • Marshall, Kandice K. & Riche, Stephanie M. & Seeley, Ralph M. & Westcott, Paul C., 2015. "Effects of Recent Energy Price Reductions on U.S. Agriculture," Miscellaneous Publications 396365, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uersmp:396365
    DOI: 10.22004/ag.econ.396365
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