RT Journal Article
SR Electronic
T1 Crop-Based Biofuel Production with Acreage Competition and Uncertainty
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 610
OP 627
DO 10.3368/le.87.4.610
VO 87
IS 4
A1 Mallory, Mindy L.
A1 Hayes, Dermot J.
A1 Babcock, Bruce A.
YR 2011
UL http://le.uwpress.org/content/87/4/610.abstract
AB This paper examines the role of uncertain crude oil prices, uncertain crop yields, and competition for acreage on corn, soybean, and switchgrass prices under biofuel production mandates. We find enforcement of the cellulosic mandate is costly in that it raises equilibrium prices of all three crops through competition for acreage. However, crude oil prices largely determine industry profitability even in the face of high crop prices. Further we find that uncertainty in crude oil prices and crop yields causes higher corn, soybean, and switchgrass prices compared to a baseline with no uncertainty. (JEL Q21, Q42)