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Bruce A Babcock - One of the best experts on this subject based on the ideXlab platform.
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the impact of us biofuel policies on agricultural price levels and volatility
China Agricultural Economic Review, 2012Co-Authors: Bruce A BabcockAbstract:Purpose - The purpose of this paper is to examine the market impacts of US biofuels and biofuel policies. Design/methodology/approach - Two methods of analysis are employed. The first method looks back in time and estimates what US Crop Prices would have been during the 2005 to 2009 marketing years under two scenarios. The second method of analysis is forward looking and examines the market impacts of the blender tax credit and mandate on the distribution of Prices in the 2011 calendar and marketing year. Findings - The results developed in the previous two sections show that US ethanol policies modestly increased maize Prices from 2006 to 2009 and that market impacts of the policies will be larger under tighter market conditions. Practical implications - More flexible US biofuel policy including removing the blenders tax credit, which does not help US biofuel industry as long as the mandates are in place, and relaxing blending mandates when feedstock supplies are low. Originality/value - This report makes three contributions to understanding the extent to which US biofuel policies contribute to higher agricultural and food Prices. First, estimates of the impact of US ethanol policies on Crop and food Prices reveal that the impacts of the subsidies were quite modest. The second contribution is to provide estimates of the impact on agricultural commodity Prices and food Prices from market-driven expansion of ethanol. The final contribution of this report is improved insight into how current US biofuel policies are expected to affect Crop Prices in the near future.
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Updated Assessment of the Drought’s Impacts on Crop Prices and Biofuel Production
American Journal of Agricultural Economics, 2012Co-Authors: Bruce A BabcockAbstract:On August 10th, USDA released updated estimates of the size of this year's corn and soybean Crops. Corn yields are now projected at 123.4 bushels per acre, which combined with a drop in projected harvested acres results in an estimated Crop size of 10.8 billion bushels-down 17 percent from USDA's July estimates. Soybean production is now estimated at 2.7 billion bushels-down 11.7 percent from July projections. The sharply lowered production estimates suggest the preliminary assessment of the impact of the drought on Crop Prices and biofuel production that I conducted last month needs to be updated.1 In the preliminary July assessment, I estimated that a waiver of the conventional ethanol mandate would reduce corn Prices by an average of 4.8 percent across the 500 model outcomes considered. The now lower estimates of corn production imply that this estimated impact of a mandate waiver is too low. However, corn and soybean production are not the only economic variables that have changed in the past month. The average gasoline price used in the July assessment was $2.50 per gallon, which was the average futures price for reformulated gasoline. The average price of the futures contracts from September 2012 to August 2013 is now $2.78 per gallon-up 11 percent. Higher gasoline Prices imply greater market demand for ethanol, which reduces a mandate waiver's impact on corn Prices. The net effect of higher gasoline Prices and lower Crop size on Crop Prices, and the impact of the mandate waiver, can only be determined by re-running the model used in my July assessment. The results from these updated model runs are presented here.
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updated assessment of the drought s impacts on Crop Prices and biofuel production
American Journal of Agricultural Economics, 2012Co-Authors: Bruce A BabcockAbstract:On August 10th, USDA released updated estimates of the size of this year's corn and soybean Crops. Corn yields are now projected at 123.4 bushels per acre, which combined with a drop in projected harvested acres results in an estimated Crop size of 10.8 billion bushels-down 17 percent from USDA's July estimates. Soybean production is now estimated at 2.7 billion bushels-down 11.7 percent from July projections. The sharply lowered production estimates suggest the preliminary assessment of the impact of the drought on Crop Prices and biofuel production that I conducted last month needs to be updated.1 In the preliminary July assessment, I estimated that a waiver of the conventional ethanol mandate would reduce corn Prices by an average of 4.8 percent across the 500 model outcomes considered. The now lower estimates of corn production imply that this estimated impact of a mandate waiver is too low. However, corn and soybean production are not the only economic variables that have changed in the past month. The average gasoline price used in the July assessment was $2.50 per gallon, which was the average futures price for reformulated gasoline. The average price of the futures contracts from September 2012 to August 2013 is now $2.78 per gallon-up 11 percent. Higher gasoline Prices imply greater market demand for ethanol, which reduces a mandate waiver's impact on corn Prices. The net effect of higher gasoline Prices and lower Crop size on Crop Prices, and the impact of the mandate waiver, can only be determined by re-running the model used in my July assessment. The results from these updated model runs are presented here.
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Preliminary Assessment of the Drought's Impacts on Crop Prices and Biofuel Production
American Journal of Agricultural Economics, 2012Co-Authors: Bruce A BabcockAbstract:Drought has sharply decreased the size of the US corn and soybean Crops this year. While there is no way of knowing for sure how low yields will go, the continuation of hot and dry weather in the major corn and soybean producing areas indicates that yield losses could be of historic proportions. The potential economic impact of low yields-particularly corn yields-is heightened this year because of a low buffer stock of corn, and because 10 percent of our motor fuel supply comes from corn. This briefing paper presents preliminary estimates of the economic impacts of low US corn and soybeans yields. The impacts are estimated for the 2012–13 Crop year that begins on September 1st. Because we do not know what future yields will be or what future gasoline Prices will be, we make the preliminary estimates using a stochastic partial equilibrium model. This type of model solves for market-clearing Prices for a large number of random "draws" of yields and gasoline Prices. The model is calibrated to information that is available to us at the current time, including the USDA's supply and demand projections and the level of futures Prices for gasoline, corn, and ethanol.
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Higher U.S. Crop Prices Trigger Little Area Expansion So Marginal Land for Biofuels is Limited
2011Co-Authors: Scott M. Swinton, Bruce A Babcock, Laura K. James, Varaprasad BandaruAbstract:By expanding energy biomass production on marginal lands that are not currently used for Crops, food Prices increase and indirect climate change effects can be mitigated. Studies of the availability of marginal lands for dedicated bioenergy Crops have focused on biophysical land traits, ignoring the human role in decisions to convert marginal land to bioenergy Crops. Recent history offers insights about farmer willingness to put non-Crop land into Crop production. The 2006–09 leap in field Crop Prices and the attendant 64% gain in typical profitability led to only a 2% increase in Crop planted area, mostly in the prairie states. At this rate, a doubling of expected profitability from biomass Crops would expand Cropland supply by only 3.2%. Yet targets for cellulosic ethanol production in the US Energy Independence and Security Act imply boosting US planted area by 10% or more with perennial biomass Crops. Given landowner reluctance to expand Crop area with familiar Crops in the short run, large scale expansion of the area in dedicated bioenergy Crops will likely be difficult and costly to achieve.
Silvia Secchi - One of the best experts on this subject based on the ideXlab platform.
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Complying with conservation compliance? An assessment of recent evidence in the US Corn Belt
Environmental Research Letters, 2020Co-Authors: Austin Holland, David A. Bennett, Silvia SecchiAbstract:Conservation provisions of US farm bills since 1985 have been aimed at mitigating negative environmental impacts of US agriculture. One of the long term goals has been to protect against soil erosion, with a focus specifically on highly erodible land (HEL). Conservation Compliance (CC) mandates that, in order to receive federal subsidies, farmers who plant annual Crops on HEL must implement a conservation plan, with practices such as rotating Crops and no-till farming. When Crop Prices increase, however, the incentives not to follow the plan increase, as conservation activities can reduce farmers' profits. This study is the first to assess the performance of conservation compliance between 2007 and 2019, a period of historically high and variable Crop Prices, using geographical information system tools and Crop data in a critical agricultural production region, the US Corn Belt. Our results indicate there was a substantial increase in continuous corn on HEL, a proxy measure for non-compliance, in several portions of the study area in correspondence with higher Crop Prices following the 2007 Energy Bill. This mirrored the change in Crop rotations on all Cropland. The increase was positively correlated with both absolute and relative corn Prices. While at the height of absolute and relative corn Prices there were increases in continuous corn on HEL everywhere across the study region except parts of Missouri, some of the largest changes occurred in environmentally sensitive regions and areas which use irrigation, thereby potentially creating disproportionate environmental impacts. Similar changes in continuous corn also occurred in all Cropland in the region, indicating that mandatory conservation programs are as vulnerable to periods of high Crop Prices as voluntary programs. Better monitoring for both CC and other conservation programs is critical to ensure the policies work as intended.
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High Crop Prices and conservation Raising the Stakes
Journal of Soil and Water Conservation, 2008Co-Authors: Silvia Secchi, John C. Tyndall, Lisa A. Schulte, Heidi AsbjornsenAbstract:A gricultural conservation policy does not happen in a vacuum but, rather, is linked to a myriad of other policies affecting individual farms, national and international trade, and energy production and distribution. While the primary purpose of commodity subsidies is to supplement farmer income, they have also had a strong influence on Cropland expansion and agricultural intensification. One result of this expansion and intensification has been burgeoning Crop productivity. Another has been a decline in the provision of ecosystem services , the benefits that people obtain from ecosystems. The services people obtain from agro ecosystems include soil stabilization and enhancement, water filtration and flood control, carbon sequestration, wildlife habitat, and recreation opportunities (e.g., hunting and wildlife viewing). This tension between farmer income support and the provision of ecosystem services is inherent to the current configuration of US agricultural conservation policies such as the Conservation Reserve Program (CRP). Developed during a time of Crop surpluses, CRP was originally a set-aside mechanism to reduce both soil erosion and the overall amount of Crops produced. Today, the program has a stronger focus on environmental impacts. The recent emergence of the bioeconomy —which we define as the production, distribution, and consumption of agricultural goods and services to meet …
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impact of high Crop Prices on environmental quality a case of iowa and the conservation reserve program
American Journal of Agricultural Economics, 2007Co-Authors: Silvia Secchi, Bruce A BabcockAbstract:Growing demand for corn due to the expansion of ethanol has increased concerns that environmentally sensitive lands retired from agricultural production into the Conservation Reserve Program (CRP) will be Cropped again. Iowa produces more ethanol than any other state in the United States, and it also produces the most corn. Thus, an examination of the impacts of higher Crop Prices on CRP land in Iowa can give insight into what we might expect nationally in the years ahead if Crop Prices remain high. We construct CRP land supply curves for various corn Prices and then estimate the environmental impacts of Cropping CRP land through the Environmental Policy Integrated Climate (EPIC) model. EPIC provides edge-of-field estimates of soil erosion, nutrient loss, and carbon sequestration. We find that incremental impacts increase dramatically as higher corn Prices bring into production more and more environmentally fragile land. Maintaining current levels of environmental quality will require substantially higher spending levels. Even allowing for the cost savings that would accrue as CRP land leaves the program, a change in targeting strategies will likely be required to ensure that the most sensitive land does not leave the program.
Viviana Maria Eugenia Perego - One of the best experts on this subject based on the ideXlab platform.
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Crop Prices and the demand for titled land: Evidence from Uganda
Journal of Development Economics, 2019Co-Authors: Viviana Maria Eugenia PeregoAbstract:Abstract I investigate how agricultural Prices affect demand for titled land, using panel data on Ugandan farmers, and a price index that weighs international Crop Prices by the structure of land use at the sub-county level. Higher Prices increase farmers' share of titled land. I also present evidence of a positive impact of Prices on agricultural incomes. The effect of Prices on land tenure is stronger when farmers have access to roads and markets, when they have undertaken investment on the land, and when households fear land grabbing.
Paul W Rhode - One of the best experts on this subject based on the ideXlab platform.
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recovery from the great depression the farm channel in spring 1933
The American Economic Review, 2019Co-Authors: Joshua K Hausman, Paul W Rhode, Johannes WielandAbstract:From March to July 1933, industrial production rose 57 percent. We show that an important source of recovery was the effect of dollar devaluation on farm Prices, incomes, and consumption. Devaluation immediately raised traded Crop Prices, and auto sales grew more rapidly in states and counties most exposed to these price increases. The response was amplified in counties with more severe farm debt burdens. For plausible assumptions about farmers’ relative MPC, the incidence of higher farm Prices, and the aggregate multiplier, this redistribution to farmers accounted for a substantial portion of spring 1933 growth. This farm channel thus provides an example of how the distributional consequences of macroeconomic policies can have large aggregate effects. That recovery in 1933 benefited from redistribution to farmers suggests an important limitation to the use of 1933 as a guide to the effects of monetary regime changes in other circumstances.
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the effects of weather shocks on Crop Prices in unfettered markets the united states prior to the farm programs 1895 1932
NBER Chapters, 2011Co-Authors: Jonathan F Fox, Price V Fishback, Paul W RhodeAbstract:This paper uses a 37-year panel of state information to identify the effects of weather fluctuations on different types of agricultural commodities. Using information from the United States Department of Agriculture and National Climatic Data Center, we estimate these effects for the staple Crops cotton, corn, and wheat. We also analyze the effects for hay, an important Crop in local agronomic production. Corn and hay are Crops with high transport costs and are used in local productive activities, while cotton and wheat are Crops with relatively low transport costs and are primarily exported to non-local markets. The results indicate that for Crops sold primarily in international markets, changes in local weather have little effect on farm-gate Prices, while changes in weather affecting the aggregate market play an important role. Crops with strong local markets such as corn and hay are much more sensitive to changes in state-level temperature, precipitation, and drought conditions. 2
Gerrit Hoogenboom - One of the best experts on this subject based on the ideXlab platform.
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Estimating the demand for irrigation water in a humid climate: A case study from the southeastern United States
Agricultural Water Management, 2009Co-Authors: Jeffrey D. Mullen, Gerrit HoogenboomAbstract:The southeastern United States typically receives more than 130cm of precipitation per year. In this region, as in others around the world, irrigation is used as a supplement to rainfall. Over the past thirty years the number of hectares under irrigation in the region has grown considerably, as has population. Policy makers are currently searching for effective tools to address water demand. This study tests the effect of water costs, Crop Prices and technology on the multiple Crop production decision using supplemental irrigation. Results for Georgia row Crop producers indicate water demand is modestly affected by water price (with elasticities between -0.01 and -0.17), but more so by Crop price (with elasticities between 0.5 and 0.82). Results also suggest adoption of lower pressure irrigation systems does not necessarily lead to lower water application rates on corn, cotton, peanuts, and soybeans.