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The integration of energy and agricultural markets

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  • Wallace E. Tyner

Abstract

This article addresses the evolving links between energy and agricultural markets. Prior to 2005, there was little correlation between energy and agricultural commodity prices. In 2006–2008, with the ethanol boom in the United States, there emerged a strong link between crude oil, gasoline, and corn prices. There was little link between ethanol and corn. However, in late 2008 and 2009, the markets changed as ethanol production came under severe economic pressure and 2 billion out of 12 billion gallons of capacity shut down. During this period ethanol became priced more on corn, as the breakeven corn price helped drive the ethanol market. This article explores the drivers in these markets as well as other major issues facing the corn ethanol industry in the United States such as the blend wall. The article concludes with a review of prospects of a future cellulosic biofuels industry.

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  • Wallace E. Tyner, 2010. "The integration of energy and agricultural markets," Agricultural Economics, International Association of Agricultural Economists, vol. 41(s1), pages 193-201, November.
    • Handle: RePEc:bla:agecon:v:41:y:2010:i:s1:p:193-201
    DOI: 10.1111/j.1574-0862.2010.00500.x
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    1. Farzad Taheripour & Wallace E. Tyner, 2010. "Biofuels, Policy Options, and Their Implications: Analyses Using Partial and General Equilibrium Approaches," Natural Resource Management and Policy, in: Madhu Khanna & Jürgen Scheffran & David Zilberman (ed.), Handbook of Bioenergy Economics and Policy, chapter 0, pages 365-383, Springer.
    2. Wallace E. Tyner & Farzad Taheripour, 2008. "Policy Options for Integrated Energy and Agricultural Markets ," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 30(3), pages 387-396.
    3. Abbott, Philip C. & Hurt, Christopher & Tyner, Wallace E., 2008. "What's Driving Food Prices?," Issue Reports 37951, Farm Foundation.
    4. Taheripour, Farzad & Tyner, Wallace E., 2008. "Ethanol Policy Analysis - What Have We Learned So Far?," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 23(3), pages 1-6.
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