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Energy cost to produce and transport crops – The driver for crop prices? Case study for Mato Grosso, Brazil

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  • Zimmer, Yelto
  • Marques, Giulio V.

Abstract

In recent years, agricultural commodity prices have followed trends similar to those observed in crude oil markets. A respective hypothesis to explain this finding: Agricultural production is so energy intensive that increasing energy costs drive cost of production of crops and ultimately commodity prices. This paper will provide answers to the question: What is the share of energy costs in total cost of production for agricultural commodities, including the transport of these commodities to ports? A case study-based calculation for cost of production and transport of soybeans and corn produced in Mato Grosso, Brazil reveals that energy costs play a significant role in total cost at the port. However, given the fact that this share is around 35%, at most, it does not seem likely that a strong correlation between crude oil prices and agricultural commodity prices is caused primarily by the energy costs of crop production and related transport.

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  • Zimmer, Yelto & Marques, Giulio V., 2021. "Energy cost to produce and transport crops – The driver for crop prices? Case study for Mato Grosso, Brazil," Energy, Elsevier, vol. 225(C).
    • Handle: RePEc:eee:energy:v:225:y:2021:i:c:s0360544221005090
    DOI: 10.1016/j.energy.2021.120260
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    References listed on IDEAS

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    Cited by:

    1. Zhuo Chen & Bo Yan & Hanwen Kang, 2022. "Dynamic correlation between crude oil and agricultural futures markets," Review of Development Economics, Wiley Blackwell, vol. 26(3), pages 1798-1849, August.
    2. Miroslava Ivanova & Lilko Dospatliev, 2023. "Effects of Diesel Price on Changes in Agricultural Commodity Prices in Bulgaria," Mathematics, MDPI, vol. 11(3), pages 1-22, January.
    3. Gustavo Rodrigues de Morais & Yuri Clements Daglia Calil & Gabriel Faria de Oliveira & Rodney Rezende Saldanha & Carlos Andrey Maia, 2023. "A Sustainable Location Model of Transshipment Terminals Applied to the Expansion Strategies of the Soybean Intermodal Transport Network in the State of Mato Grosso, Brazil," Sustainability, MDPI, vol. 15(2), pages 1-27, January.

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