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Drought, ethanol, and livestock

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  • Hao, Na
  • Colson, Gregory
  • Seong, Byeongchan
  • Park, Cheolwoo
  • Wetzstein, Michael

Abstract

The 2012 drought in the U.S. Midwest resulted in volatile crop prices. With field crops constituting a major input in livestock production, livestock producers sought a waiver to Renewable Fuel Standard biofuel mandates. They believed such a waiver would mitigate crop-price volatility; given crops are major inputs in biofuel production. The U.S. Environmental Protection Agency (EPA) denied the waiver under the belief that the waiver would have minimal if any impact on mitigating price volatility. Employing a VECM, the objective is to investigate if it was prudent for the EPA to reject the waiver. Results generally support EPA's conclusion that the waiver relaxing the biofuel mandate would have minimal impact.

Suggested Citation

  • Hao, Na & Colson, Gregory & Seong, Byeongchan & Park, Cheolwoo & Wetzstein, Michael, 2015. "Drought, ethanol, and livestock," Energy Economics, Elsevier, vol. 49(C), pages 301-307.
    • Handle: RePEc:eee:eneeco:v:49:y:2015:i:c:p:301-307
    DOI: 10.1016/j.eneco.2015.02.008
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    Cited by:

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    2. Héctor L. Venegas-Quiñones & Mark Thomasson & Pablo A. Garcia-Chevesich, 2020. "Water Scarcity Or Drought? The Cause And Solution For The Lack Of Water In Laguna De Aculeo," Water Conservation & Management (WCM), Zibeline International Publishing, vol. 4(1), pages 42-50:4, March.
    3. Chiu, Fan-Ping & Hsu, Chia-Sheng & Ho, Alan & Chen, Chi-Chung, 2016. "Modeling the price relationships between crude oil, energy crops and biofuels," Energy, Elsevier, vol. 109(C), pages 845-857.

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    More about this item

    Keywords

    Biofuel mandates; Corn; Drought; Ethanol; Livestock; Soybeans;
    All these keywords.

    JEL classification:

    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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